Question
Bank of Melbourne has granted a two million loan to Qantas Ltd. with an annual 0.05 loan rate. The bank keeps a capital ratio of
Bank of Melbourne has granted a two million loan to Qantas Ltd. with an annual 0.05 loan rate. The bank keeps a capital ratio of 10% under Basel Accord III and requires a minimum compensating balance ratio of 0.2. Qantas has paid $8000as loan origination fee to the bank. What is the gross return rate of this loan? (Keep three decimals in the answer and do not input %.)Bank of Melbourne has granted a two million loan to Qantas Ltd. with an annual 0.05 loan rate. The bank keeps a capital ratio of 10% under Basel Accord III and requires a minimum compensating balance ratio of 0.2. Qantas has paid $8000as loan origination fee to the bank. What is the gross return rate of this loan? (Keep three decimals in the answer and do not input %.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started