From the following facts, Molly Roe has requested you to calculate the average daily balance. The...

From the following facts, Molly Roe has requested you to calculate the average daily balance. The customer believes the average daily balance should be $877.67. Respond to the customer’s concern.

28-day billing cycle
3/18	Billing date	$	704	Previous balance
3/24	Payment	$	58	cr.
3/29	Charge: Sears		205
4/5	Payment		20	cr.
4/9	Charge: Macy’s		188

Average daily balance: ____

Expert Solution

Ans: Average Daily balnce is arrived as per below :

Closing balance/Billing cycle

In this question, customer is incorrect about his daily closing balance of $877.67.

Correct Average daily balance is $591.964

Date	Particulars	Transaction amount	Type	Closing Balance
18-Mar	biling date	704	Credit	704
19-Mar		704	Credit	704
20-Mar		704	Credit	704
21-Mar		704	Credit	704
22-Mar		704	Credit	704
23-Mar		704	Credit	704
24-Mar	payment	58	Credit	762
25-Mar				762
26-Mar				762
27-Mar				762
28-Mar				762
29-Mar		-205	debit	557
30-Mar				557
31-Mar				557
01-Apr				557
02-Apr				557
03-Apr				557
04-Apr				557
05-Apr		20	Credit	577
06-Apr				577
07-Apr				577
08-Apr				577
09-Apr		-188		389
10-Apr				389
11-Apr				389
12-Apr				389
13-Apr				389
14-Apr				389

Average Daily balance				591.9643

jeff jeffy answered 1 year ago

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