To calculate the average daily balance, we need to determine how many days each balance amount remained unchanged and then use the formula for the average daily balance:

$\text{Average Daily Balance} = \frac{\sum (\text{Balance} \times \text{Days})}{\text{Total Days in Period}}$

Here's the breakdown from the table you provided:

Step 1: Identify Balance and Days

For each date range, multiply the balance by the number of days it remained unchanged.

1. May 1 - May 4 (3 days): Balance of $1,000 $1,000 \times 3 = 3,000$

2. May 4 - May 7 (3 days): Balance of $1,193 $1,193 \times 3 = 3,579$

3. May 7 - May 9 (2 days): Balance of $1,318 $1,318 \times 2 = 2,636$

4. May 9 - May 13 (4 days): Balance of $1,461 $1,461 \times 4 = 5,844$

5. May 13 - May 16 (3 days): Balance of $1,647 $1,647 \times 3 = 4,941$

6. May 16 onward (assume 15 days if May 31 is the statement end date): Balance of $1,834 $1,834 \times 15 = 27,510$

Step 2: Calculate the Total Balance-Days and Total Days

Add up all these values:

$3,000 + 3,579 + 2,636 + 5,844 + 4,941 + 27,510 = 47,510$

The total number of days in May is 31.

Step 3: Find the Average Daily Balance

$\text{Average Daily Balance} = \frac{47,510}{31} \approx 1,532.58$

Final Answer:

The average daily balance is approximately $1,532.58.

Would you like further clarification on any step?

Related Questions

1. How would the average daily balance change if the last transaction occurred on a different day?
2. Why do we use the average daily balance for calculating credit card interest?
3. What effect would a higher purchase amount have on the average daily balance?
4. How does the average daily balance method compare to the adjusted balance method?
5. How can understanding average daily balance help in managing credit card debt?

Tip:

To minimize interest charges, try to keep your average daily balance low by paying off the balance early in the billing cycle.