Answered step by step
Verified Expert Solution
Question
1 Approved Answer
cannot figure out calculations, keeps saying it wrong even though im pretty sure im doing it correctly Colson Company has a line of credit with
cannot figure out calculations, keeps saying it wrong even though im pretty sure im doing it correctly
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $474,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.50 percent (3.50 percent + 3.00 percent) annual interest on $76,900 for the month of January. Month January February March April Amount Borrowed or (Repaid) $ 76,900 123,000 (19,700) 25,800 Prime Rate for the Month 3.50% 2.50 3.00 3.50 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liability at the end of each of the first four months. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year answers to the nearest whole dollar.) Month Interest Paid January February March April :X Dawid Required A Required B Compute the amount of Colson's liabi Round your final answers to the near Month Balance End of Month January February March AprilStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started