Finance 4720 . Any help would be great. Thanks in advance

( 20 points ) Nature This is a problem similar to those found in Chapter 16 . Angus Bank has issued the - year loan commitment of of million for an up front fee of all basis points . The back end fee on the unused portion of the commitment is 15 basis points . The bank's have rate on loans is S. 5 percent , and loans in this customer carry a rich premium of 15 percent . The bank requires a compensating balance on loans of percent to be placed and maintained in demand deposits and Angus Bank must Maintain reserve requirements on demand deposits of 19 percent . The customer in expected to draw down to percent of the commitment is the beginning of the year . What is the expected return on this loan ? Using the formula : 1 + 1 201 10 BR mind 1 - [ beatmo RRI ] 1 2 1 1 1 1 1 1 1 10 5 1 1 . 70 ( 1 . 5 5 0 .1 5 ( 201 10 . 20 - 10 . 101 701 1 0.101 percent Alternatively using dollar values Up front fee 1 0 0 4 0 * ST( 10 0 6 0 0 Interest income 10700 * 5109 0 0 0 090 ( 1 7 ) Back-and fee ". on15 x Ston 80 0 0 0 ( 1 - 1 7 ) Total revenue Funds committed = Ston . 090 090 0 7 ) - 54900 . 100 ( compensating balance stop . one . 909 0 70 7 0 07 1 1 + $490 .090 ( reserve requirements on demand deposits = stoo . 0 0 0 0 0 0 0 70 0 07 ( 1 1 ) = Expected rate of return = Total Revenue Funds Committed percent