Finding Finance Charge

Question

In John Balfour's credit card account interest is charged on the average daily balance. The cycle begins on May 4, and the cycle ends on June 3. The beginning balance is $ 295.64 . A payment of $200 is posted on May 18. A charge of $17.43 is posted on May 7. A charge of $59.56 is posted on May 12. A charge of $119.45 is posted on May 29. John is charged 1.03% per period. What is the finance charge for the cycle?

Answer 1

May has 31 days.  The way I find avg daily balance is to add (or subtract) all the different charges/credits multiplies by the number of days after each thing is posted.

 

$295.64*31 days - $200*17 days + $17.43*28 + $59.56*23 + $199.45*6 = $8,819.46

 

$8,819.46/31 days in the month = $284.50

 

I'm assuming that 1.03% per period means per month? So the finance charge is 1.03% * $284.50 = $2.93