1. Problem 1: Calculate the average daily balance, finance charge, and current balance for a credit card with the following transactions: - Previous balance: 6000 on May 9 - Purchase: 5000 on May 14 - Payment: 1250 on May 26 - Next billing date: June 9 - Interest rate: 3.5% per month Step 1: Determine the number of days in each balance period from May 9 to June 9 (31 days total). - May 9 to May 13 (5 days): balance = 6000 - May 14 to May 25 (12 days): balance = 6000 + 5000 = 11000 - May 26 to June 9 (15 days): balance = 11000 - 1250 = 9750 Step 2: Calculate the weighted sum of balances: $$\text{Sum} = 6000 \times 5 + 11000 \times 12 + 9750 \times 15 = 30000 + 132000 + 146250 = 308250$$ Step 3: Calculate the average daily balance: $$\text{Average daily balance} = \frac{308250}{31} = 9943.55$$ Step 4: Calculate the finance charge using the interest rate 3.5%: $$\text{Finance charge} = 9943.55 \times 0.035 = 348.02$$ Step 5: Calculate the current balance: $$\text{Current balance} = \text{Average daily balance} + \text{Finance charge} = 9943.55 + 348.02 = 10291.57$$ --- 2. Problem 2: Find the average daily balance for a credit card with: - Balance: 6800 on December 1 - Purchase: 3400 on December 9 - Payment: 1700 on December 19 - Next billing date: January 1 (31 days in December) Step 1: Determine balance periods: - Dec 1 to Dec 8 (8 days): balance = 6800 - Dec 9 to Dec 18 (10 days): balance = 6800 + 3400 = 10200 - Dec 19 to Dec 31 (13 days): balance = 10200 - 1700 = 8500 Step 2: Calculate weighted sum: $$\text{Sum} = 6800 \times 8 + 10200 \times 10 + 8500 \times 13 = 54400 + 102000 + 110500 = 266900$$ Step 3: Calculate average daily balance: $$\text{Average daily balance} = \frac{266900}{31} = 8603.23$$ --- 3. Problem 3: Calculate average daily balance, finance charge, and current balance for Cardo's bill: - Previous balance: 5000 due Nov 5 - Purchase: 3700 on Nov 9 - Purchase: 7900 on Nov 21 - Payment: 2550 on Nov 16 - Interest rate: 2.5% per month - Next billing date: every 5th of the month Step 1: Determine balance periods from Nov 5 to Dec 5 (31 days): - Nov 5 to Nov 8 (4 days): balance = 5000 - Nov 9 to Nov 15 (7 days): balance = 5000 + 3700 = 8700 - Nov 16 to Nov 20 (5 days): balance = 8700 - 2550 = 6150 - Nov 21 to Dec 5 (15 days): balance = 6150 + 7900 = 14050 Step 2: Calculate weighted sum: $$\text{Sum} = 5000 \times 4 + 8700 \times 7 + 6150 \times 5 + 14050 \times 15 = 20000 + 60900 + 30750 + 210750 = 322400$$ Step 3: Calculate average daily balance: $$\text{Average daily balance} = \frac{322400}{31} = 10400$$ Step 4: Calculate finance charge: $$\text{Finance charge} = 10400 \times 0.025 = 260$$ Step 5: Calculate current balance: $$\text{Current balance} = 10400 + 260 = 10660$$