A medical facility arranges a five-year $50,000 line of credit with its bank with a monthly interest rate of 0.4%. The facility borrowed $10,000 initially but paid that off six months later. Two more months have passed with no additional borrowing. What will the line of credit interest expense be for the most recent month?

Question

Quizplus · Accepted Answer

Since the facility paid off the initial borrowing of $10,000 six months later and no additional borrowing has occurred in the following two months, the balance on the line of credit is $0. Therefore, the interest expense for the most recent month would also be $0.

A Medical Facility Arranges a Five-Year $50,000 Line of Credit