question archive Chase has a $42,500 line of credit which charges an annual percentage rate of prime rate plus 5%
Chase has a $42,500 line of credit which charges an annual percentage rate of prime rate plus 5%
Subject:FinancePrice:3.87 Bought7
Chase has a $42,500 line of credit which charges an annual percentage rate of prime rate plus 5%. His starting balance on June 1 was $2,550. On June 4, he borrowed $5,300. On June 9, Chris made a payment of $800, and on June 17, he borrowed $5,600. If the current prime rate is 10%, what is his new balance?
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Answer:
Total interest rate = 10%+5% = 15%
Daily rate = 15%/360 = 0.000417
Balance from June 1 to June 4th = 2550. Interest for this duration = 3 days*0.000417*2550 = 3.1875
Balance from June 4th to June 9th = 2550+5300 = 7850. Interest for this duration = 5 days*0.000417*7850 = 16.3541
Balance from June 9th to June 17th = 7850 - 800 = 7050. Interest for this duration = 8 days*0.000417*7050 = 23.5
Balance from June 17th to June 30th = 7050+5600 = 12650. Interest for this duration = 14 days*0.000417*12650 = 73.7916
Total interest = 3.1875+16.3541+23.5+73.7916 = 116.833
Thus new balance = 12,650+116.833
= 12,766.83
| Prime rate | 10% | ||||
| Add: Extra Interest | 5% | Days amount outstanding | Balance | Daily Rate | Total Interest |
| Total interest rate | 15% | 3 | 2550 | 0.000417 | 3.1875 |
| 5 | 7850 | 0.000417 | 16.35416667 | ||
| 8 | 7050 | 0.000417 | 23.5 | ||
| 14 | 12650 | 0.000417 | 73.79166667 | ||
| 116.8333333 | |||||
| New Balance | 12766.83 |
