To determine the finance charge on the average daily balance for the credit card over the one-month period, follow these steps:
1. Calculate the total balance for each specified period:
- For days [tex]\(1-5\)[/tex]: The balance is [tex]$200. So, the total balance for these days is:
\[
200 \times 5 = 1000
\]
- For days \(6-20\): The balance is $[/tex]350. So, the total balance for these days is:
[tex]\[
350 \times 15 = 5250
\][/tex]
- For days [tex]\(21-30\)[/tex]: The balance is [tex]$150. So, the total balance for these days is:
\[
150 \times 10 = 1500
\]
2. Calculate the total balance over the entire period:
\[
1000 + 5250 + 1500 = 7750
\]
3. Calculate the average daily balance:
\[
\frac{7750}{30} = 258.3333333333333
\]
4. Determine the Monthly Interest Rate:
- The Annual Percentage Rate (APR) is 15.5%. To convert this to a monthly rate, divide by 12:
\[
\frac{15.5\%}{12} = 0.0129166666666667
\]
5. Calculate the finance charge:
\[
258.3333333333333 \times 0.0129166666666667 = 3.3368055555555554
\]
So, the finance charge on the average daily balance for this credit card over the one-month period is:
\[
\text{Finance Charge} = \$[/tex]3.34
\]
