Exercise 10.5A (Algo) Calculations for a line of credit L.O 10.2 Cotson Company has a line of credit with Federal Bank. Colson can borrow up to $450,500 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage, along with the amounts borrowod and ropaid during the first four months of Year 1 . Colson agreed to poy interest ot on annual rate equal to 2.00 percent above the bank's prime rate. Funds are borrowed of repoid on the first day of each month. Interest is poysble 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 (4.50 percent +200 percent) annual interest on $75,000 for the month of January. Required: a. Compute the amount of interest that Colson will pay on the line of credil for the first four months of Yoar 1. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. b. Compute the amount of Colson's liability at the end of each of the first four months. Note: Round your final answers to the nearest whole dollar