Norris Company has a line of credit with the Everett State Bank. Norris agreed t

Question

Norris Company has a line of credit with the Everett State Bank. Norris agreed to pay intrest at an annual rate equal to 2% above the bank's prime rate. Funds are borrowed or repaid on the first day of each month and interest is paid on the last day of each month. Activity to date is given as follows:

Month     Amt. Borrowed or (Repaid)      Prime Rate for the Month
Jan.                 $20,000                                   6%
Feb.                 $30,000                                  5%
March               ($20,000)                               3%

The amount of intrest paid at the end of March would be: (Please explain how you got your answer)

A.) $75

B.) $125

C.) $133

D.) $150

Explanation / Answer

The answer is B Hope this helps

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