Thank you for visiting For a credit card billing period describe how the average daily balance is determined Why is this computation somewhat tedious when done by hand. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Final answer:
The average daily balance for a credit card billing period is found by summing up the balance for each day, then dividing by the number of days. This process can be tedious by hand because of the numerous daily transactions to account for.
Explanation:
For a credit card billing period, the average daily balance is determined by adding the balance on each day of the billing period and then dividing that total by the number of days in the billing period. Each day's balance is determined by adding any new purchases and subtracting any payments and credits. This can get tedious when done by hand because you're dealing with multiple days and potentially lots of daily transactions. You must ensure to not miss any transaction, as that would result in an incorrect calculation. Hence, it's usually computed via automated systems by banks.
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Answer:
The average daily balance total's each day's balance for the billing cycle and is then divided by the total number of days in the billing cycle. This will be tedious if done by hand because each day will need to be calculated.
Explanation: Example: If your balance was $300 yesterday and then you spend $200 today your balance will be $500. If your billing cycle is 28 days, and you don't spend anymore your balance will be $500. Your average daily balance is calculated like this= 500/28= $17.85. $17.85 will be your average daily balance.
