Question
A firm has an average loan outstanding of $7,000,000 on a $10,000,000 line of credit. There is a commitment fee of 0.25% on the unused
A firm has an average loan outstanding of $7,000,000 on a $10,000,000 line of credit. There is a commitment fee of 0.25% on the unused portion of the line, and the interest rate on the borrowed funds is 4.0%. What is the effective annual borrowing rate on the line of credit?
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An Introduction To Financial Markets A Quantitative Approach
Authors: Paolo Brandimarte
1st Edition
1118014774, 9781118014776
