Bronwyn's $15,000 Line of Credit Is at Prime Plus 2

question 102

Short Answer

Bronwyn's $15,000 line of credit is at prime plus 2.5%. The minimum payment (the greater of $100 or 3% of the combined principal and accrued interest) is automatically deducted from her chequing account on the 15^th of each month. After the payment on August 15, her balance was $3,589.80. To reduce the loan faster, she makes an additional discretionary payment of $300 on the last day of each month. Each $300 payment is applied entirely to principal. Prepare a repayment schedule for the August 15 to November 15 period. The prime rate was at 6.25% on August 15 but dropped 0.25% effective October 11.

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Definitions:

Multiple Baseline

A research design that involves observing behavior before and after an intervention across multiple settings or subjects.

Analogue Experiment

A research method where participants are exposed to conditions that simulate or approximate the characteristics of real-life situations in a controlled setting.

Conditioning

The process of learning associations between environmental stimuli and behavioral responses.

High-Pitched Noise

Sounds of a high frequency that may be irritating or may cause discomfort or even damage to hearing over time.