Bronwyns $15,000 line of credit is at prime plus 2.5%. The minimum payment (the greater of $100

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Bronwyn’s $15,000 line of credit is at prime plus 2.5%. The minimum payment (the greater of $100 or 3% of the combined principal and accrued interest) is automatically deducted from her chequing account on the fifteenth of each month. After the payment on August 15, her balance was $3589.80. To reduce the loan faster, she makes an additional discretionary payment of $300 on the last day of each month. Each $300 payment is applied entirely to principal. Prepare a repayment schedule for the August 15 to November 15 period. The prime rate was at 6.25% on August 15 but dropped 0.25% effective October 11.
Line of Credit A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...

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