Charmin Paper Company sells to the 12 accounts listed next.

Account

Receivable
Balance Outstanding

Average Age of
the Account
Over the Last Year

A

$

64,300

27

B

212,000

43

C

74,900

13

D

20,300

61

E

56,600

42

F

260,000

32

G

35,200

25

H

321,000

68

I

49,900

31

J

92,000

51

K

284,000

18

L

66,000

33

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Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less; 80 percent for account balances between 31 and 40 days; and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan.

The current prime rate is 18.50 percent, and Capital charges 4.50 percent over prime to Charmin as its annual loan rate.

a.	Determine the maximum loan for which Charmin Paper Company could qualify.

Maximum loan amount

$

b.	Determine how much one months interest expense would be on the loan balance determined in part a. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Interest expense

$