John Smith has a credit card that charges 12% annual interest on the monthly average daily balance for the billing cycle. The current billing cycle has 31 days. For 18 days his balance was $2,510.67. For 6 days the balance was $1,510.67. And for 7 days the balance was $1,861.06. Find the average daily balance. Find the amount of interest.

John Smith has a credit card that charges 12% annual interest on the monthly average daily balance for the billing cycle. The current billing cycle has 31 days. For 18 days his balance was $2,510.67. For 6 days the balance was $1,510.67. And for 7 days the balance was $1,861.06. Find the average daily balance. Find the amount of interest.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

John Smith has a credit card that charges

12%

annual interest on the monthly average daily balance for the billing cycle. The current billing cycle has

days. For

days his balance was

$2,510.67.

For

days the balance was

$1,510.67.

And for

days the balance was

$1,861.06.

Find the average daily balance. Find the amount of interest.

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