Financial Algebra Chapter 4 Day 24 Introduction
Average Daily Balance by hand with Credit Calendar
Name:
Chapter 4.6 Pg 206 – 208
Per:
Do Now: Calculate the average daily balance for a credit card bill given the following information:
For seven days owed $319.22
For nine days owed $472.58
For eleven days owed $194.46
For three days owed $204.97
Average Daily Balance, which you already learned to calculate one way, can also be determined using a credit
billing calendar, often called a credit calendar. Credit card statements do not tell you how many days you owe a
certain amount of money, you have to figure it out yourself.
Guided example: The billing cycle for a credit card bill is October 14th – November 13th. You had a previous
balance of $829.30, a purchase on October 25 for $67.00, a purchase on October 29 for $55.00, and a payment
made on November 5 for $160.00. Calculate the average daily balance using the credit calendar.
How to fill in the credit calendar:
Step 1: Fill in the calendar days of the problem in the bottom right corner of each block. Month in the upper left.
Step 2: Fill in the previous balance for the first day of calendar until the day before the first purchase/payment.
Step 3: On the day of the purchase/payment, add the purchase/subtract the payment, from the previous day
Step 4: Write the new total down until the day before the next purchase/payment and follow step 3.
Continue to the end. Cross out any unused dates on the calendar.
Now that you have the credit calendar filled in, either add all the days together and divide by the number of days,
or use the average daily balance method from the Do Now:
1) The billing cycle for a credit card bill is April 10th – May 9th. You had a previous balance of $104.27, a purchase
on April 21 for $82.43, a payment on April 29 for $75.00, and a purchase made on May 2 for $94.71. Calculate
the average daily balance using the credit calendar.
Find the average daily balance:
2) The billing cycle for a credit card bill is February 23th – March 22th on a non-leap year. You had a previous
balance of $261.74, a purchase on Feb 27 for $51.86, a purchase on March 5 for $98.07, and a payment made on
March 16 for $200.00. Calculate the average daily balance using the credit calendar.
Find the average daily balance: