Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund inventory purchases for your

Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund inventory purchases for your small business. The total loan available was $1,020,000, of which you took down $770,000. It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $770,000) of $7,870 on this loan commitment. You remember that the up-front fee was 60 basis points, what is the back-end fee on this loan commitment.

Multiple Choice:

A. 30 basis points

B. 70 basis points

C. 7 basis points

D. 3 basis points

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Describe the new structures for the HRM function. page 676

Answered: 1 week ago