Newman Medical had a cash balance of $10,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Newman pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this years quarterly results. The only part I need help with is the Interest Expense per Month and the Borrowing (repayment). Can you please explain how you get these numbers? Thanks!

Newman Medical Clinic has budgeted the following cash flows. January February March $105,000 $111,000 $131,000 Cash receipts Cash payments For inventory purchases For S&A expenses 92,500 74,50087,500 33,500 34,500 29,500