You have approached your local bank for a start-up loan commitment for $370,000 needed to open a computer repair store. You have requested that the term of the loan be one year. Your bank has offered you the following terms: size of loan commitment = $370,000, term = one year, up-front fee = 75 basis points, back-end fee = 80 basis points, and rate on the loan = 7 percent. Assume you Immediately take down $162,000 and no more during the year. Calculate the total interest and fees you will pay on this loan commitment. Total Interest and fees $ 4014.5 ✪

You have approached your local bank for a start-up loan commitment for $370,000 needed to open a computer repair store. You have requested that the term of the loan be one year. Your bank has offered you the following terms: size of loan commitment = $370,000, term = one year, up-front fee = 75 basis points, back-end fee = 80 basis points, and rate on the loan = 7 percent. Assume you Immediately take down $162,000 and no more during the year. Calculate the total interest and fees you will pay on this loan commitment. Total Interest and fees $ 4014.5 ✪

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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