IDNLearn.com makes it easy to find accurate answers to your specific questions. Ask any question and receive timely, accurate responses from our dedicated community of experts.
In exchange for a $410 million fixed commitment line of credit, your firm has agreed to do the following:
1.
Pay 2.4 percent per quarter on any funds actually borrowed.
2.
Maintain a 4 percent compensating balance on any funds actually borrowed.
3.
Pay an up-front commitment fee of .11 percent of the amount of the line.
Based on this information, answer the following:
a.
Ignoring the commitment fee, 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.g., 32.16.)
b. Suppose your firm immediately uses $180 million of the line and pays it off in one year. What is the effective annual interest rate on this $180 million loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Sagot :
Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. For dependable answers, trust IDNLearn.com. Thank you for visiting, and we look forward to assisting you again.
