Dr. Robillard obtained a $75,000 operating line of credit at prime plus 1%. Accrued interest up to

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Dr. Robillard obtained a $75,000 operating line of credit at prime plus 1%. Accrued interest up to but not including the last day of the month is deducted from his bank account on the last day of each month. On February 5 (of a leap year) he received the first draw of $15,000. He made a payment of $10,000 toward principal on March 15, but took another draw of $7000 on May 1. Prepare a loan repayment schedule showing the amount of interest charged to his bank account on the last days of February, March, April, and May. Assume that the prime rate remained at 7.5% through to the end of May.
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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