Solve the problem. Round to the nearest cent.
-On September 1, the unpaid balance in an account was $188. On September 3, a payment of $60 was made. The finance charge rate was 1.0% per month of the average daily balance. Find the
Finance charge for the month of September.

Question

Quizplus · Accepted Answer

The average daily balance is calculated by taking the sum of the daily balances and dividing by the number of days in the month. From September 1 to September 2, the balance was $188, and from September 3 to September 30, the balance was $128 ($188 - $60). The average daily balance is thus $\frac{(2 \times 188) + (28 \times 128)}{30}$. The finance charge is 1.0% of this average daily balance. Calculating this gives a finance charge of approximately $1.32, rounding to the nearest cent.

Solve the Problem. Round to the Nearest Cent