Mayfair Fashions has a $90,000 line of credit from the Bank of Montreal. Interest at prime plus 2% is deducted from Mayfair's chequing account on the 24^th of each month. Mayfair initially drew down $40,000 on March 8 and another $15,000 on April 2. On June 5, $25,000 of principal was repaid. If the prime rate was 5.25% on March 8 and rose by 0.25% effective May 13, what were the first four interest deductions charged to the store's account?

Question

Quizplus · Accepted Answer

The Answer of Mayfair Fashions has a $90,000 line of credit from the Bank of Montreal. Interest at prime plus 2% is deducted from Mayfair's chequing account on the 24^th of each month. Mayfair initially drew down $40,000 on March 8 and another $15,000 on April 2. On June 5, $25,000 of principal was repaid. If the prime rate was 5.25% on March 8 and rose by 0.25% effective May 13, what were the first four interest deductions charged to the store's account?

Mayfair Fashions Has a $90,000 Line of Credit from the Bank