Questions: The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.4% of the average daily balance. Calculate parts a-d using the statement in the popup. a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is 2054.29. (Round to the nearest cent as needed.) b. Find the interest to be paid on July 1, the next billing date. Round to the nearest cent. The interest to be paid on July 1 is 28.76. (Use the answer from part a to find this answer. Round to the nearest cent as needed.) c. Find the balance due on July 1. The balance due on July 1 is . (Use the answer from part b to find this answer.)

Solution Steps

To solve the given problem, we need to follow these steps:

a. Calculate the average daily balance by summing up the daily balances for each day in the billing period and dividing by the number of days in the billing period.

b. Calculate the interest to be paid by multiplying the average daily balance by the monthly interest rate.

c. Calculate the balance due on July 1 by adding the interest calculated in part b to the average daily balance.

To find the interest to be paid on July 1, we use the formula:

\[ \text{Interest} = \text{Average Daily Balance} \times \text{Monthly Interest Rate} \]

Substituting the values:

\[ \text{Interest} = 2054.29 \times 0.014 = 28.76 \]

The balance due on July 1 is calculated by adding the interest to the average daily balance:

\[ \text{Balance Due} = \text{Average Daily Balance} + \text{Interest} \]

Substituting the values:

\[ \text{Balance Due} = 2054.29 + 28.76 = 2083.05 \]

Final Answer