BMI Ltd. had arranged with the bank for a 6 month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges commitment fee of 0.5% annually on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months.

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Question 24

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Marked out of 3.00

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a. On the BMI Line of Credit: what is the total interest charged: $ Answer

Question 25

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Marked out of 3.00

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b. On the BMI Line of Credit: what is the total commitment fee charged: $ Answer