What is the effective interest rate on an overdraft facility where the bank requires 3.5% interest per quarter average utilization and a quarterly commission of 0.4% of limit? It is estimated that 70% of the limit of SEK 500,000 will be utilized.
What is the effective interest rate on an overdraft facility where the bank requires 3.5% interest per quarter average utilization and a quarterly commission of 0.4% of limit? It is estimated that 70% of the limit of SEK 500,000 will be utilized.
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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![What is the effective interest rate on an
overdraft facility where the bank requires 3.5%
interest per quarter average utilization and a
quarterly commission of 0.4% of limit? It is
estimated that 70% of the limit of SEK 500,000
will be utilized.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79cf6500-035b-4cbb-ad42-f874daf6c678%2Ff05d432b-c558-4f0c-b18f-fbcc32dc5e2a%2F9808dwr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:What is the effective interest rate on an
overdraft facility where the bank requires 3.5%
interest per quarter average utilization and a
quarterly commission of 0.4% of limit? It is
estimated that 70% of the limit of SEK 500,000
will be utilized.
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