Kurt's Music Has a Line of Credit with a Local

question 44

Multiple Choice

Kurt's Music has a line of credit with a local bank that permits it to borrow up to $650,000 at any time.The interest rate is .64 percent per month.The bank charges compound interest and also requires that 2 percent of the amount borrowed be deposited into a non-interest-bearing account.How much interest will the firm pay if it needs $200,000 of cash for three months to pay its operating expenses?

• A)$3,943.50
• B)$3,949.21
• C)$4,017.02
• D)$3,864.63
• E)$3,902.11

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