Assume the following: Melita carried an average daily balance of $550 on her credit card this month. Her previous balance last month was $1,000, compared to a balance of $100 this month. There are 30 days in this billing cycle and Melita always makes a payment on the fifteenth of the month. Based on this information, calculate the monthly interest charges for credit card accounts charging 14 percent, 16 percent, and 18 percent interest. Complete the following chart. Since the average daily balance is the most commonly used balance calculation method, is shopping for a lower interest rate really that important?
