The September finance charge will be greater by $0.41 if the purchase occurred on September 7th and the payment occurred on September 20th than the payment occurred on September 7th and the purchase occurred on September 20th.
The average daily balance totals each day's balance for the billing cycle and divides by the total number of days in the billing cycle.
When the payment occurred on 7th and purchase on 20th:
Balance in between September 1st and September 7th = $449.22
Balance in between September 7th and September 20th =449.22-85.33=$363.89
Balance in between September 20th and September 30th = 363.89+60.99
=$424.88
So, the balance on which interest will be applied according to the daily balance method = (449.22 * 6+363.89 * 13+424.89 *11)/30 = $403.322
Interest on this balance = 403.22 * (13.73/12) * (1/100) = $4.615
Similarly, when the payment occurred on the 20th while purchasing on the 7th:
The balance on which interest will be applied according to the daily balance method = (449.22 * 6 + 510.21 * 13 + 424.88*6)/30 = $395.911
Interest on this balance = $395.911 *(13.73/12) * (1/100) = $4.199
Difference between interests = $0.41
Therefore, the September finance charge will be greater by $0.41 if the purchase occurred on September 7th and the payment occurred on September 20th than the payment occurred on September 7th and the purchase occurred on September 20th.
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