Determine the Missing Information for the Following Line of Credit

Determine the missing information for the following line of credit.
Harold has a line of credit secured by the equity in his home. The limit on his line of credit is $85 000. Transactions for the period May 1 to September 30 are shown below. Harold owed $45 967.06 on his line of credit on May 1.
Principal Principal Interest
Date Withdrawal Payment Payment Balance
---------------------------------------------------------------------------------------------
May 01 -45 967.06
30 1200.00 ?
June 23 5 050.00
30 2200.00 ?
July 10 6700.00 ?
Aug 05 11 700.00
31 8200.00 ?
Sept 30 6200.00 ?
Note: "-" indicates a negative balance.
Overdraft interest is 28.8% p.a. The line of credit interest is variable. It was 6.15% on May 1, 6.50% effective June 20, and 6.55% effective September 10.
a) Calculate the interest payments on May 31, June 30, July 31, August 31, and September 30.
b) What is the account balance on September 30?

Correct Answer:

Verified

Balance May 1 -45967.06
Balance May 1 -4...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

View Full Answer For Free