Dexter has a credit card that uses the average daily balance method. For the first 15 days of a 31-day billing cycle, his balance was $2110, but then he paid off his entire balance and didn't make any new purchases. If his credit card's APR is 26%, how much was Dexter charged in interest for the billing cycle? Show your work.

Question

Shane Stanley

Mathematics

9 May, 05:07

Dexter has a credit card that uses the average daily balance method. For the first 15 days of a 31-day billing cycle, his balance was $2110, but then he paid off his entire balance and didn't make any new purchases. If his credit card's APR is 26%, how much was Dexter charged in interest for the billing cycle? Show your work.

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Answers (2)

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Espinoza · Answer 1

For the average daily balance method of calculation of credit card charges, we sum up the daily charges each day, including those days that no additional transactions are made.

Days 1 - 15 total = $2,110

Days 16 - 31 = ($2,110) x 16 = $33,760

Then add up the two values giving us $35,870. We divide this value by the number of days in the billing cycle

($33,750) / 31 = $1157.096.

Then, for his charge over the course of the billing cyle,

($1157.096) x (0.26) x (31/365) = $25.55

Therefore, he will be charged of an interest amounting to $25.55.

Coleman Dean · Answer 2

But that’s not one of the answer choices. The answer choices are A. $22.55 B.$24.05 C.$46.59 D.$0