Shoreline Yachts Has a $1 Million Line of Credit with the Royal

Essay

Shoreline Yachts has a $1 million line of credit with the Royal Bank secured by its inventory of sailboats. Interest is charged at the floating (naturally!) rate of prime plus 2% on the 10^th of each month (for days up to but not including the 10^th). On February 10 (of a non-leap year), the loan balance stood at $770,000 and the prime rate at 6.5%. Shoreline took an additional $100,000 draw on March 1. Spring sales enabled Shoreline to make payments of $125,000 and $150,000 against the principal on March 30 and April 28. The prime rate rose by 0.5% on April 8. What total interest was Shoreline charged for the 3 months from February 10 to May 10? Present a repayment schedule showing how this interest figure was determined.