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4-6 AVERAGE DAILY BALANCE

Learn how to calculate the average daily balance and finance charge using the credit calendar. Verify balance accuracy and optimize payment timing. Improve financial management skills.

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4-6 AVERAGE DAILY BALANCE

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  1. 4-6AVERAGE DAILY BALANCE OBJECTIVES Calculatethe average daily balance using the credit calendar. Calculatethe finance charge using the credit calendar.

  2. average daily balance credit calendar Key Terms

  3. Example 1 Use the information given in Elena Kaye’s credit card statement to verify the accuracy of her average daily balance.

  4. CHECK YOUR UNDERSTANDING Is there a better time during the billing cycle when Elena could have made her payment so that the average daily balance would have been less?

  5. Example 2 Determine the finance charge for Elena’s billing cycle.

  6. CHECK YOUR UNDERSTANDING When might Elena have made her purchases during the billing cycle in order to decrease her finance charge?

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