H2X Excavating LLC has a $100,000 line of credit at its bank. During the past 31-day month, the company has used $80,000 of this line of credit. The interest rate is 7% APR. a. What will the interest charge be for this month? b. For the upcoming 30-day month, management is projecting that for the first 10 days of the month the balance on the line of credit will be $80,000 and for the last 20 days of the month the balance will be $50,000. How much interest expense should management budget for the upcoming month? c. If the interest rate increased to 9%, what would the interest charge be for a 28-day month, if the entire line of credit was used for the entire month?
H2X Excavating LLC has a $100,000 line of credit at its bank. During the past 31-day month, the company has used $80,000 of this line of credit. The interest rate is 7% APR. a. What will the interest charge be for this month? b. For the upcoming 30-day month, management is projecting that for the first 10 days of the month the balance on the line of credit will be $80,000 and for the last 20 days of the month the balance will be $50,000. How much interest expense should management budget for the upcoming month? c. If the interest rate increased to 9%, what would the interest charge be for a 28-day month, if the entire line of credit was used for the entire month?
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
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H2X Excavating LLC has a $100,000 line of credit at its bank. During the past 31-day month, the company has used $80,000 of this line of credit. The interest rate is 7% APR.
a. What will the interest charge be for this month?
b. For the upcoming 30-day month, management is projecting that for the first 10 days of the month the balance on the line of credit will be $80,000 and for the last 20 days of the month the balance will be $50,000. How much interest expense should management budget for the upcoming month?
c. If the interest rate increased to 9%, what would the interest charge be for a 28-day month, if the entire line of credit was used for the entire month?
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