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Finance Dictionary and Glossary of Investment Terms
Average Daily Balance Method
Definition 1.
A finance/accounting method where costs (and interest) are based on the amount(s) owing at the end of each day.
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Definition 2.
A technique for calculating finance charges (such as in a bank account, charge account, or credit card account) based on average balance that existed each day. Interest charges under this method are usually higher than the adjusted balance method but lower than the previous balance method.
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