Poindexter has a credit card that uses the average daily balance method. For the first 15 days of a 31-day 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 poindeexter charged in interest for the billing cycle

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Business

Adrian Fitzgerald

11 December, 12:21

Poindexter has a credit card that uses the average daily balance method. For the first 15 days of a 31-day 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 poindeexter charged in interest for the billing cycle

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Answers (2)

Know the Answer?

Yasmin Dickson · Answer 1

Yasmin Dickson 11 December, 12:38

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22.55 is the answer on Apex.

Johnathan Reynolds · Answer 2

Answer: $22.54

Given:

Poindexter's credit card uses the average daily balance method.

After the first 15 days of a 31-day cycle, his balance was $2110

He paid off his entire balance and didn't make any new purchases

His credit card's APR is 26%,

His average daily balance for the month can be computed as:

Day 1 - 15 $2110

Day 16 - 31 %0

(Day 1 Balance + Day 2 Balance + Day 3 Balance ...) / number of days in the billing cycle

($2110x15) / 31

$31,650/31

$1020.97

The interest Poindexter will be charged for the billing cycle is as follows:

((.26/365) * 1020.97) * 31=

0.000712*1020.97

0.72 * 31

$22.54