Question

"A customer buys 100 shares of ABC at $90, depositing the Regulation T requirement. She holds the position for two months, during which $100 of interest is charged on the debit balance. What is the adjusted debit balance at the end of the two month period?"

Answer 1

$4,600

Step-by-step explanation:

Calculation for the adjusted debit balance at the end of the two month period

Using this formula

Adjusted debit balance = (Number of shares × Shares amount ÷ Numbers of months) + Interest amount

Let plug in the formula

Adjusted debit balance= (100 shares ×$90÷2 months) +$100

Adjusted debit balance = ($9,000÷ 2 months) +$100

Adjusted debit balance=$4,500+$100

Adjusted debit balance=$4,600

Therefore the adjusted debit balance at the end of the two month period will be $4,600