Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Determine the missing information for the following line of credit. Exotic Furnishings Ltd. has a line of credit secured by the equity in the business.
Determine the missing information for the following line of credit. Exotic Furnishings Ltd. has a line of credit secured by the equity in the business. The limit on the line of credit is $45,000. Transactions for the period April 1 to September 30 are shown below. The amount Exotic owed on April 1 is given in the April 1 balance. Use the Simple Interest Method. First, determine the balance by adding each each payment and subtracting each withdrawal. Second, calculate the monthly interest payments. Date Withdraw Payment Apr 1 Apr 30 200 May 23 5,000 May 31 200 Jun 30 200 Jul 19 5,000 Jul 31 200 Aug 5 11,400 Aug 31 200 Sep 30 200 Balance -25,533.12 a.) What is the account balance on September 30? a.) What is the account balance on September 30? This is a negative number. Do not include the dollar sign, "$", in your answers. Do not include the comma usually used to indicate thousands. The line of credit agreement requires a regular payment (as indicated on the record of transactions) on the principal plus interest (including overdraft interest) by electronic transfer after closing on the last day of each month. Overdraft interest is 15% p.a. The line of credit interest is variable. It was 6% on April 1, 5.5% effective June 20, and 5% effective September 10. b.) Calculate the monthly interest payments. Apr 30 May 31 Jun 30 Jul 31 Aug 31 Sep 30
Step 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