1. Average daily balance is as follows a. Previous balance method: $600 x .013 = $7.80 b. Adjusted balance method: $600 + $230 – $200 = $630 $630 x .013 = $8.19 Assuming the average balance is increasing, the

1. Average daily balance is as follows a.         Previous balance method: $600 x .013 = $7.80 b.         Adjusted balance method: $600 + $230 – $200 = $630 $630 x .013 = $8.19 Assuming the average balance is increasing, the previous balance method would be preferred since it would provide smaller finance charges.