Balance by using the average daily balance method

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A firm has a $55,000 line of credit. The annual percentage rate is the current prime rate plus 4.5%. The balance on March 1 was $12,300. On March 7, the firm borrowed $16,700 to pay for merchandise, and on March 21 it borrowed another $8,800. On March 26, a $20,000 payment was made on the account. The billing cycle for March has 31 days. If the current prime rate is 8 ½%, what is the finance charge on the account, and what is the firm’s new balance by using the average daily balance method?

Reference no: EM131353511

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