How to Calculate Finance Charge by Average Daily Balance

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Part of the video series: How to Operate an Accounting Calculator

Accounting Calculator Features

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Summary: Learn how to calculate finance charges by average daily balance with expert math tips in this free online accounting video clip.

Views: 2,651 | Tags: operate, work, math, accounting, calculator, calculators

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About the Expert

Joseph Salazar Joseph Salazar has been performing magic for almost his entire life. He became interested as a child after watching a movie about Harry Houdini, and began pr... read more

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Video Transcript

How to Calculate Finance Charge by Average Daily Balance

Hi I'm Joe Salazar with Expert Village I'm going to show to calculate finance charges on the accounting calculator. Calculating finance charges by the average balance method, if the average daily balance is 3,000 we divide it by the number of days in the billing cycle. We're going to say 30, and then we are going to multiply it by the rate of interest. The average daily balance divided by the rate of interest or times the rate of interest which is 21% and add it. And the result is on the screen and on the tape.