Everlyne has a personal LOC with her bank with a maximum credit limit of $9,000.00. The interest rate is prime plus 1.5%, and the current prime rate is 4.75%. Regardless of any account transaction activity, her bank requires on the first of every month for her to pay "the greater of 5% of the current balance or $100" from her checking account. She is allowed to exceed her maximum credit limit, but if she does the entire balance is subject to 22% interest until such time as the balance is restored below the credit limit. On October 1, the opening balance on her LOC was $2,200.00. She took advances of $4,000.00, $3,800.00, and $3,200.00 on October 21, November 16, and December 1, respectively. She made payments of $4,300.00, $3,200.00, and $3,500.00 on November 1, November 21, and December 10, respectively. The prime rate decreased by 0.75% on November 7. Complete the repayment schedule below by filling in the interest charges for October, November, and December. Date Balance Annual before Interest Transaction Rate Number of Days Interest Accrued Charged Interest Payment (+) or Advance Principal Amount Balance after Transaction (-) Oct 1 $2,200.00 Oct 21 $2,200.00 6.25% 20/365 -$4,000.00 $4,000.00 $6,200.00 Nov 1 $6,200.00 6.25% 11/365 $4,610.96 $4,591.75 $1,608.25 Nov 7 $1,608.25 6.25% 6/365 $0.00 $0.00 $1,608.25 Nov 16 $1,608.25 5.5% 9/365 -$3,800.00-$3,800.00 $5,408.25 Nov 21 $5,408.25 5.5% 5/365 $3,200.00 $3,200.00 $2,208.25 Dec 1 $2,208.25 5.5% 10/365 Dec 10 $5,308.51 5.5% 9/365 Jan 1 $1,808.51 5.5% 22/365 -$3,089.03 -$3,100.26 $5,308.51 $3,500.00 $3,500.00 $1,808.51 $100.00 $86.80 $1,721.71
Everlyne has a personal LOC with her bank with a maximum credit limit of $9,000.00. The interest rate is prime plus 1.5%, and the current prime rate is 4.75%. Regardless of any account transaction activity, her bank requires on the first of every month for her to pay "the greater of 5% of the current balance or $100" from her checking account. She is allowed to exceed her maximum credit limit, but if she does the entire balance is subject to 22% interest until such time as the balance is restored below the credit limit. On October 1, the opening balance on her LOC was $2,200.00. She took advances of $4,000.00, $3,800.00, and $3,200.00 on October 21, November 16, and December 1, respectively. She made payments of $4,300.00, $3,200.00, and $3,500.00 on November 1, November 21, and December 10, respectively. The prime rate decreased by 0.75% on November 7. Complete the repayment schedule below by filling in the interest charges for October, November, and December. Date Balance Annual before Interest Transaction Rate Number of Days Interest Accrued Charged Interest Payment (+) or Advance Principal Amount Balance after Transaction (-) Oct 1 $2,200.00 Oct 21 $2,200.00 6.25% 20/365 -$4,000.00 $4,000.00 $6,200.00 Nov 1 $6,200.00 6.25% 11/365 $4,610.96 $4,591.75 $1,608.25 Nov 7 $1,608.25 6.25% 6/365 $0.00 $0.00 $1,608.25 Nov 16 $1,608.25 5.5% 9/365 -$3,800.00-$3,800.00 $5,408.25 Nov 21 $5,408.25 5.5% 5/365 $3,200.00 $3,200.00 $2,208.25 Dec 1 $2,208.25 5.5% 10/365 Dec 10 $5,308.51 5.5% 9/365 Jan 1 $1,808.51 5.5% 22/365 -$3,089.03 -$3,100.26 $5,308.51 $3,500.00 $3,500.00 $1,808.51 $100.00 $86.80 $1,721.71
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Everlyne has a personal LOC with her bank with a maximum credit limit of $9,000.00. The interest rate is prime plus 1.5%, and the current prime
rate is 4.75%. Regardless of any account transaction activity, her bank requires on the first of every month for her to pay "the greater of 5% of
the current balance or $100" from her checking account. She is allowed to exceed her maximum credit limit, but if she does the entire balance is
subject to 22% interest until such time as the balance is restored below the credit limit. On October 1, the opening balance on her LOC was
$2,200.00. She took advances of $4,000.00, $3,800.00, and $3,200.00 on October 21, November 16, and December 1, respectively. She made
payments of $4,300.00, $3,200.00, and $3,500.00 on November 1, November 21, and December 10, respectively. The prime rate decreased by
0.75% on November 7.
Complete the repayment schedule below by filling in the interest charges for October, November, and December.
Date
Balance Annual
before Interest
Transaction Rate
Number
Interest
of Days Charged
Accrued
Interest
Payment
(+) or
Advance
Principal
Amount
Balance after
Transaction
(-)
Oct 1
Oct 21
Nov 1
$2,200.00
$2,200.00 6.25%
20/365
-$4,000.00-$4,000.00
$6,200.00
$6,200.00
6.25% 11/365
$4,610.96 $4,591.75
$1,608.25
Nov 7
$1,608.25
6.25%
6/365
$0.00
$0.00
$1,608.25
Nov 16
$1,608.25
5.5%
9/365
-$3,800.00-$3,800.00
$5,408.25
Nov 21
$5,408.25
5.5%
5/365
$3,200.00
$3,200.00
$2,208.25
Dec 1 $2,208.25
5.5%
10/365
-$3,089.03
-$3,100.26
$5,308.51
Dec 10
$5,308.51
5.5%
9/365
$3,500.00 $3,500.00
$1,808.51
Jan 1
$1,808.51
5.5%
22/365
$100.00
$86.80
$1,721.71
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