Question
You're offered a committed line of credit for $1,000,000 with an EAR of 10%. You borrow $800,000 at the beginning of the year and pay
You're offered a committed line of credit for $1,000,000 with an EAR of 10%. You borrow $800,000 at the beginning of the year and pay it all back at the end. The loan has a commitment fee of 0.5% (EAR) charged on the unused portion of the line of credit.
Attempt 1/10 for 8.5 pts.
Part 1
What is the effective annual rate of the loan?
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Financial Management An Introduction
Authors: Jim McMenamin
1st Edition
0415181623, 9780415181624
