Dr Robillard Obtained a $75,000 Operating Line of Credit at Prime

Essay

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 non-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 $7,000 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 3.5% through to the end of May.