(Computing floating-rate loans) After looking at a fixed-rate loan, Ace-Campbell Manufacturing entered into a floating-rate loan agreement. This loan is set at 40 basis points

(or .40 percent) over an index based on LIBOR. Ace-Campbell is concerned that the LIBOR index may go up, causing the loan cost to climb. That concern comes from the fact that the interest rate on the loan adjusts weekly based on the closing value of the LIBOR index for the previous week. Fortunately for Ace-Campbell, this loan has a maximum annual rate of 2.2 percent. It also has a minimum annual rate of 1.50 percent. Given the following information, calculate the interest rate that Ace-Campbell would pay during Weeks 2 through 10.

Transcribed Image Text:

Week LIBOR 1 1.98% 2 1.66% 3 1.52% 4 1.35% 5 1.60% 6 1.63% 7 1.67% 8 1.88% 9 1.93%