Muriel has a line of credit with a limit of $10 000. She owed $8195 on July

Question:

Muriel has a with a limit of $10 000. She owed $8195 on July 1. Principal withdrawals for the period July 1 to November 30 were $3000 on August 20 and $600 on October 25. The agreement requires regular payments of $300 on the 15th day of each month. Muriel has made all required payments. Interest (including overdraft interest) is charged to the account on the last day of each month. The interest rate was 8% on July 1, but was changed to 7.5% effective September 15. Overdraft interest is 16% for any balance in excess of $10 000.
(a) Calculate the interest charges on July 31, August 31, September 30, October 31, and November 30.
(b) Calculate the account balance on November 30.
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...