An automotive dealer borrowed $7100.00 from the Bank of Montreal on a demand note on May 15. Interest on the loan, calculated on the daily balance, is charged to the dealer's current account on the 15th of each month. The automotive dealer made a payment of $1600 on July 21, a payment of $3600 on October 1, and repaid the balance on December 1. The rate of interest on the loan on May 15 was 4% per annum. The rate was changed to 4.4% on August 1 and to 4.7% on October 1. What was the total interest cost for the loan?
An automotive dealer borrowed $7100.00 from the Bank of Montreal on a demand note on May 15. Interest on the loan, calculated on the daily balance, is charged to the dealer's current account on the 15th of each month. The automotive dealer made a payment of $1600 on July 21, a payment of $3600 on October 1, and repaid the balance on December 1. The rate of interest on the loan on May 15 was 4% per annum. The rate was changed to 4.4% on August 1 and to 4.7% on October 1. What was the total interest cost for the loan?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An automotive dealer borrowed $7100.00 from the Bank of Montreal on a demand note on May 15. Interest on the loan, calculated on the daily balance, is charged to the dealer's current account on the 15th of each month. The automotive dealer made a payment of $1600 on July 21, a payment of $3600 on October 1, and repaid the balance on December 1. The rate of interest on the loan on May 15 was 4% per annum. The rate was changed to 4.4% on August 1 and to 4.7% on October 1. What was the total interest cost for the loan?
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