Financial Math: Average Daily Balance Method for charging interest on open end credit (credit cards)
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At the beginning of a 31-day billing period, there is an unpaid balance of $780 on a credit card. Three days before the end of the billing period, a payment of $400 is made. In this video, we calculate the finance charge at 3.2% monthly interest using the average daily balance method. I use the TI30XIIS Calculator in the video. The exercise comes from the MyLabs Math homework associated with the textbook Mathematical Ideas. This is part of the Financial Mathematics chapter in a MGF1107 Survey of Mathematics course.
