Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.8% p.a. on positive balances and pay daily interest of 7% p.a. on negative (line of credit) balances. Overdraft interest is 16% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below.

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Part 1

(a) Calculate the amount of interest earned.

Calculate the interest earned on each positive balance and then add them together. Use

r=1.8%=0.018

with I=Prt.

Part 2

Find the total interest earned, rounding to the nearest cent.

Totalinterestearned=520.41(0.018)4365+394.41(0.018)4365

	Transaction Description	Deposit	Withdrawal	Balance
October	1	Balance			727.59
	10	Cheque 263		591.00	1318.59
	13	Cheque 264		299.00	1617.59
	20	Deposit	2138.00		520.41
	24	Cheque 265		126.00	394.41
	28	Cheque 266		187.00	207.41
	31