On May 9 Rainbow Daycare established an open line of credit with its bank and immediately withdrew $25,000. The interest rate was set at prime + 4.75%, and the prime rate was 6.75%. The line of credit requires a payment on the 9th of every month in the amount of "$1,000 or 5% of the current balance, whichever is greater." Rainbow Daycare took another advance of $15,000 on June 2. It made a payment of $28,000 on July 16. The prime rate decreased by 0.5% on June 30. Create a repayment schedule from May 9 to August 9 and calculate the total interest paid by Rainbow Daycare.
On May 9 Rainbow Daycare established an open line of credit with its bank and immediately withdrew $25,000. The interest rate was set at prime + 4.75%, and the prime rate was 6.75%. The line of credit requires a payment on the 9th of every month in the amount of "$1,000 or 5% of the current balance, whichever is greater." Rainbow Daycare took another advance of $15,000 on June 2. It made a payment of $28,000 on July 16. The prime rate decreased by 0.5% on June 30. Create a repayment schedule from May 9 to August 9 and calculate the total interest paid by Rainbow Daycare.
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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| On May 9 Rainbow Daycare established an open line of credit with its bank and immediately withdrew $25,000. The interest rate was set at prime + 4.75%, and the prime rate was 6.75%. The line of credit requires a payment on the 9th of every month in the amount of "$1,000 or 5% of the current balance, whichever is greater." Rainbow Daycare took another advance of $15,000 on June 2. It made a payment of $28,000 on July 16. The prime rate decreased by 0.5% on June 30. Create a repayment schedule from May 9 to August 9 and calculate the total interest paid by Rainbow Daycare. |
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