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Sunny Way landscaping has a formal line of credit of $500,000 with First Commerce Bank. The interest rate on the loan is 6 percent and
Sunny Way landscaping has a formal line of credit of $500,000 with First Commerce Bank. The interest rate on the loan is 6 percent and under the agreement Sunny Skies must pay an annual fee of 75 basis points on the unused amount. The amount currently outstanding on the loan is $325,000. What is the annual fee the company must pay on the current unused balance? What is the effective interest rate?
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