According to a credit agreement with the company's bank, Frank promises to have a minimum cash balance of $20,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at an annual interest rate of 12%, paid on the last day of each month. The company has a cash balance of $20,000 and a loan balance of $40,000 at January 1. Prepare monthly cash budgets for each of the first three months of next year.

I am not sure how to approach this problem. The 160 000 is something that I have to put into equation?