Question

1. in may, the sum of your daily balances totaled $763.40. your previous balance was $45.74 and you made a $20 payment. you had new purchases that totaled $132.85. if the periodic rate is 7.99%, what is your new balance?

Explanation:

Step1: Calculate average daily balance

First, find the average daily balance by dividing the sum of daily balances by the number of days in May (31 days).
$\text{Average Daily Balance} = \frac{763.40}{31} = 24.6258$

Step2: Compute finance charge

Multiply the average daily balance by the periodic rate (converted to decimal).
$\text{Finance Charge} = 24.6258 \times 0.0799 = 1.9676$

Step3: Calculate adjusted previous balance

Subtract the payment from the previous balance.
$\text{Adjusted Previous Balance} = 45.74 - 20 = 25.74$

Step4: Sum adjusted balance, purchases, charge

Add the adjusted previous balance, new purchases, and finance charge to get the new balance.
$\text{New Balance} = 25.74 + 132.85 + 1.9676$

Answer:

$\$160.56$ (rounded to the nearest cent)