Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Everlyne has a personal LOC with her bank with a maximum credit limit of $10,000.00. The interest rate is prime plus 2%, and the

image

Everlyne has a personal LOC with her bank with a maximum credit limit of $10,000.00. The interest rate is prime plus 2%, and the current prime rate is 4.5%. Regardless of any account transaction activity, her bank requires on the first of every month for her to pay "the greater of 5% of the current balance or $100" from her checking account. She is allowed to exceed her maximum credit limit, but if she does the entire balance is subject to 24% interest until such time as the balance is restored below the credit limit. On October 1, the opening balance on her LOC was $3,000.00. She took advances of $3,400.00, $3,800.00, and $4,800.00 on October 18, November 18, and December 1, respectively. She made payments of $3,000.00, $4,600.00, and $4,400.00 on November 1, November 24, and December 14, respectively. The prime rate decreased by 0.5% on November 7. Complete the repayment schedule below by filling in the interest charges for October, November, and December. Date Balance Annual before Interest Transaction Rate Number Interest of Days Charged Accrued Interest Payment (+) or Advance Principal Amount Balance after Transaction. (-) Oct 1 $3,000.00 Oct 18 $3,000.00 6.5% 17/365 -$3,400.00 $3,400.00 $6,400.00 Nov 1 $6,400.00 6.5% 14/365 Nov 7 $3,103.79 6.5% 6/365 $3,321.25 $3.296.21 $0.00 $3,103.79 Nov 18 $3,103.79 6% 11/365 $0.00 -$3,800.00 $3,800.00 $3,103.79 $6,903.79 Nov 24 $6,903.79 6% 6/365 $4,600.00 $4,600.00 $2,303.79 Dec 1 Dec 14 $2,303.79 6% 7/365 -$4,683.89 -$4,702.28 $7,006.07 $7,006.07 6% 13/365 Jan 1 $2,606.07 6% 18/365 $131.44 $4,400.00 $4,400.00 $108.76 $2,606.07 $2,497.31

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey Of Accounting

Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds

6th Edition

1260575292, 978-1260575293

More Books

Students also viewed these Accounting questions

Question

How would you respond to each of the girls?

Answered: 1 week ago

Question

4. To enhance group cohesiveness.

Answered: 1 week ago