Answer
See below
Work Step by Step
(a)
Now, compute the average daily balance using the equation as shown below:
\[\begin{align}
& \text{Average daily balance}=\frac{\text{Sum of unpaid balances for each day in the billing period}}{\text{Number of days in the billing period}} \\
& =\frac{\$216,950}{31}\\&\approx\$6,998.38\end{align}\]
(b)
Compute the amount of interest payable using the equation as shown below:
\[\begin{align}
& \text{Interest}=\left( \text{Average daily balance} \right)\times \left( \text{Interest rate} \right)\times \left( \text{Time} \right) \\
& =\$6,998.38\times0.015\times1\\&=~\$104.97\end{align}\]
(c)
Compute the amount of balance due as on 1st April using the equation as shown below:
\[\begin{align}
& \text{Balance due as on April }{{\text{1}}^{\text{st}}}=\text{Balance due}+\text{Interest} \\
& =\$7,130+\$104.97\\&=\$7,234.97\end{align}\]
(d)
The amount of balance due as on April 1st is \[\$7234.97\] which is more than\[\$360\], so the customer has to pay off the balance due.
\[\begin{align}
& \text{Minimum monthly payment}=\frac{\text{Balance due}}{36} \\
& =\frac{\$7,234.97}{36}\\&\approx\$200.97\end{align}\]
