Mrs. Chen has been approved for a personal (revolving) line of credit with National Bank at prime plus 2%. On the 15th of each month, interest is calculated (up to but not including the 15) and deducted from her chequing account. If the initial loan of $25,000 on July 2 was followed by a further advance of $30,000 on July 28, how much interest was charged on August 15. The prime rate was at 3% on July 2 and fell to 2.75% on August 5. Show all rough work (complete the table filling in all blank information) Period Number of days Principal ($) Rate (%) Interest ($) $25,000 x 0.05 x 13/365 = 44.5205 July 2-15 13 25,000 5.00 Total (Interest Due on Aug 15):
Mrs. Chen has been approved for a personal (revolving) line of credit with National Bank at prime plus 2%. On the 15th of each month, interest is calculated (up to but not including the 15) and deducted from her chequing account. If the initial loan of $25,000 on July 2 was followed by a further advance of $30,000 on July 28, how much interest was charged on August 15. The prime rate was at 3% on July 2 and fell to 2.75% on August 5. Show all rough work (complete the table filling in all blank information) Period Number of days Principal ($) Rate (%) Interest ($) $25,000 x 0.05 x 13/365 = 44.5205 July 2-15 13 25,000 5.00 Total (Interest Due on Aug 15):
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Paragraph
BIU
...
Period
Number of days
Principal ($)
Rate (%)
Interest ($)
$25,000 x 0.05 x
July 2-15
13
25,000
5.00
13/365 = 44.5205
Ea
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Transcribed Image Text:Mrs. Chen has been approved for a personal (revolving) line of credit with National Bank at prime plus 2%.
On the 15th of each month, interest is calculated (up to but not including the 15) and deducted from her
chequing account. If the initial loan of $25,000 on July 2 was followed by a further advance of $30,000 on
July 28, how much interest was charged on August 15. The prime rate was at 3% on July 2 and fell to 2.75%
on August 5. Show all rough work (complete the table filling in all blank information)
Period
Number of days Principal ($)
Rate (%)
Interest ($)
$25,000 x 0.05
x 13/365 =
44.5205
July 2-15
13
25,000
5.00
Total (Interest Due on Aug 15):
Paragraph
BIU
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