Question
Howard Ltd. negotiated a line of credit atthe Bank of Montreal with a CAD 3,500,000 limit.During March, the company borrowed CAD 2,000,000 throughout the month
Howard Ltd. negotiated a line of credit atthe Bank of Montreal with a CAD 3,500,000 limit.During March, the company borrowed CAD 2,000,000 throughout the month at a loan rate of prime plus 3.0%.Prime is currently 5.0% and March has 31 days.The Bank of Montreal charged an annual commitment fee of 0.5% on the unused balance of the line of credit and required a compensating balance of 5.0%.
The effective interest rate for March expressed on an annual basis is ...?
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Contemporary Business Mathematics With Canadian Applications
Authors: Ali R. Hassanlou, S. A. Hummelbrunner, Kelly Halliday
12th Edition
0135285011, 978-0135285015
