Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In exchange for a $400 million food commitment line of credit your finhas agreed to do the following 1. Pay 107 percent per quarter on
In exchange for a $400 million food commitment line of credit your finhas agreed to do the following 1. Pay 107 percent per quarter on any funds actually borrowed 2. Maintain a 1 percent compensating balance on any funds actually borrowed 3. Pay an up-front commitment toe of 0.23 percent of the amount of the line Based on this information, answer the following a. Ignoring the commitment too, what is the effective annual interest rate on this line of credit (Do not found intermediate calculations and enter your answer as a percent rounded to 2 decimal places....3216) Effective annuaire b. Suppose your firmimmediately uses 5227 million of the line and pay it off in one year. What is the effective annual interest rate on this $227 milion loan? (Do not found intermediate calculations and enter your answer as a percent rounded to 2 decimal places, .32.16.) Efective annual rato In exchange for a $400 million fixed commitment ine of credit, your fem has agreed to do the following 1. Pay 197 percent per quarter on any funds actually borrowed 2. Maintain a 1 percent compensating balance on any funds actually borrowed 3. Pay an up-tront comment fee of O 23 percent of the amount of the line Based on this information, answer the following: a. Ignoring the commitment to what is the effective annual interest rate on this line of credit? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e. 32.16) Effective annual rate b. Suppose your fimmediately $227 million of the line and pays it off in one year. What is the effective annual interest rate on this $227 milion loan (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places... 12.10.) Ettective annual rate
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