Question
Metrobank offers one year loans with a 9% stated rate, charges a 0.50% origination fee, requires 8% compensating balances, and faces a 10% reserve requirement.
Metrobank offers one year loans with a 9% stated rate, charges a 0.50% origination fee, requires 8% compensating balances, and faces a 10% reserve requirement. What is the return to bank on these loans?
Using the information from above, what is the true cost of this loan to the borrower?
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Advanced Financial Accounting
Authors: Richard Lewis, David Pendrill
7th Edition
0273658492, 978-0273658498
