A borrower arranged a 250,000,000 credit line with a bank. It drew down:

• 20% for the first quarter of the year
• An additional 20% for the second quarter
• The remaining for the second half.

Assume the interest rate was 3% for the first quarter, and 3.2% for the rest of the year.

The unused credit line fee was 0.2%.

Ignore day counts for this question; that is, just use for each three month period.

1. What is the interest amount and fee amount for each quarter?
2. What is the effective all in cost of the borrowing? Do this by tallying up the average amount actually borrowed over the course of the year. Then calculate the total amount paid to the bank, and divide.