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4-6AVERAGE DAILY BALANCE

Calculate the average daily balance using the credit calendar.

Calculate the finance charge using the credit calendar.

OBJECTIVES

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average daily balance credit calendar

Key Terms

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Example 1Example 1 Use the information given in Elena Kaye’s credit card

statement to verify the accuracy of her average daily balance.

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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?

CHECK YOUR UNDERSTANDING

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

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When might Elena have made her purchases during the billing cycle in order to decrease her finance charge?

CHECK YOUR UNDERSTANDING