I have the answer to "Exercise 7-7" attached. I'm just wondering why they calculated the interest that way. Why would it not be 70,000 x .03 x 6/12 = 1050?

Prepare the company's selling and administrative expense budget for the upcoming fiscal year. EXERCISE 7-7 Cash Budget Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has pared the following summary of its budgeted cash flows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter TAKE TWO Total cash receipts $180,000 $330,000 $210,000 $230,000 Total cash disbursements $260,000 $230,000 $220,000 $240,000 ,000 The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the upcoming fiscal year