ged with the bank for a 6-month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges a commitment fee of 0.5% annually on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months. 1 question what is the total interest charged? 2 question what is the total commitment fee charged
ged with the bank for a 6-month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges a commitment fee of 0.5% annually on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months. 1 question what is the total interest charged? 2 question what is the total commitment fee charged
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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BMI Ltd. had arranged with the bank for a 6-month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges a commitment fee of 0.5% annually on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months.
1 question
what is the total interest charged?
2 question
what is the total commitment fee charged?
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