Question 1

Ruxandra's Canada Student Loans totalled $7200 by the time she finished Conestoga College in April. The accrued interest at prime plus 2.5% for the grace period was converted to principal on October

Accepted Answer

The answer of Ruxandra's Canada Student Loans totalled $7200 by...

Question 2

George borrowed $4000 on demand from CIBC on January 28 for an RRSP contribution. Because he used the loan proceeds to purchase CIBC's mutual funds for his RRSP, the interest rate on the loan was set at the bank's prime rate. George agreed to make monthly payments of $600 (except for a smaller final payment) on the twenty-first of each month, beginning February 21. The prime rate was initially 6.75%, dropped to 6.5% effective May 15, and decreased another 0.25% on July 5. It was not a leap year. Construct a repayment schedule showing the amount of each payment and the allocation of each payment to interest and principal.

Accepted Answer

The answer of George borrowed $4000 on demand from CIBC...

Question 3

Ms. Wadeson obtained a $15,000 demand loan from the Canadian Imperial Bank of Commerce on May 23 to purchase a car. The interest rate on the loan was prime plus 2%. The loan required payments of $700 on the 15th of each month, beginning June 15. The prime rate was 7.5% at the outset, dropped to 7.25% on July 26, and then jumped by 0.5% on September 14. Prepare a loan repayment schedule showing the details of the first five payments.

Accepted Answer

The answer of Ms. Wadeson obtained a $15,000 demand loan...

Question 4

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?

Accepted Answer

The answer of Mayfair Fashions has a $90,000 line of...

Question 5