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On August 10, a credit card account had a balance of $345. A purchase of $58 was made on August 15, and $155 was charged on August 27. A payment of $73 was made on August 15. The interest on the average daily balance is 1.15% per month. Find the finance charge on the September 10 bill.



Answer :

Answer:

The finance charge on the September 10 bill is $5.08.

Explanation:

Note: See the attached excel file for the calculation of the sum of total amount owed each day (in bold red color).

From the attached excel file, we have:

Sum of total amount owed each day = $11,675

Average daily balance = Sum of total amount owed each day / Number of days in the billing period = $11,675 / 31 = $376.61

Finance charge = Average daily balance * Interest rate per month = $376.61 * 1.35% = $5.08

Therefore, the finance charge on the September 10 bill is $5.08.

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