Question

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

Answer 1

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

Answer 2

22.55 is the answer on Apex.