Using the average daily balance method and the information​ given, find the credit card finance charge for the month of August​ (31 days). The annual interest rate is​ 18%.

Question

July 31st (Balance) $590
August 5 (Charge) $90
August 9 (Payment)$560
August 14 (Charge)$193
August 24 (Charge)$41

I do not know how to do this. I know I am using I=PRT. However, I am getting my answers wrong.

Aug.5-8 (590+90=680)3*680=2040
Aug.9-13 (680-560=$120)4*120=480
Aug.14-23 (120+193-$313)9*313=2817
Aug.24-24 (313+41=$354) 1*354

Second part
2040+480+2817+354=5691
5691/31(days)=183.6 (Round to nearest cent)

Third Part

I=PRT

183.6*.18*31/365=2.8068 (Round to nearest cent)

Final Answer that I got was 2.80

However, this is incorrect. I am not sure what I am doing wrong.

THANKS!

Answer 1

I haven't don't simple interest in a while so don't quote me on this but I think you're missing the T part of the equation eg. P x R x T = I.
rate is 18x31/365,
P is ...
but where is T in your final equation?
hope that was relevant.