PC Financial Approved a $75 000 Line of Credit on a Demand

Essay

PC Financial approved a $75 000 line of credit on a demand basis to Little Blessings day care to finance equipment.Interest at the rate of prime plus 1% is charged to the account at the bank on the 15^th of each month.The initial advance was $45 000 on July 15,when the prime rate stood at 3%.There were further advances of $8000 on August 20 and $10 000 on September 10.Payments of $15 000 each were applied against the principal on October 1 and November 1.What was the total interest accumulated on the loan for the period July 15 to November 15?