Mayfair Fashions has a $90,000 line of credit from the Bank of Montreal. Interest at prime plus

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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 twenty-fourth 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?
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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