Chapter 7, Problem 3DTM

(a)

Summary Introduction

To calculate: The average daily balance of Kwithout new purchase.

Introduction: The average daily balance method uses the average of the daily outstanding balance in a given billing cycle as the base on which the finance charges for the period is calculated.

(b)

Summary Introduction

To calculate: The finance charge using an average daily balance of K without new purchase assuming APR as 19.2%.

Introduction: The average daily balance method uses the average of the daily outstanding balance in a given billing cycle as the base on which the finance charges for the period are calculated.

(c)

Summary Introduction

To calculate: The average daily balance of K of April month with a new purchase.

Introduction: The average daily balance method uses the average of the daily outstanding balance in a given billing cycle as the base on which the finance charges for the period are calculated.

(d)

Summary Introduction

To calculate: The finance changes using an average daily balance of K of with new purchase assuming APR as 19.2%.

Introduction: The average daily balance method uses the average of the daily outstanding balance in a given billing cycle as the base on which the finance charges for the period are calculated.