The Century Corporation has a $50,000 line of credit with Prime Bank. The annual percentage rate is the current prime plus 4.3% based on the average daily balance. The balance of the account on September 1 was $18,200. On September 12 Century borrowed
$10,000 to pay for a shipment of merchandise, and on September 18 they borrowed another $5,200 for equipment rental. On September 25 a $20,000 payment was made on the account. The current prime rate is 6 1/2%. a. What is the finance charge on the account? b. What is Century's new balance?
a. $205.08
b. $13,605.08
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