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):

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

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