AFP
CTP · Question #162
(Topic 2) A company has negotiated a credit facility with the following terms: $5,000,000 line of credit $3,000,000 average borrowing 30 basis point commitment fee on the unused portion of the line…
The correct answer is B. 6.2%. See the full explanation below for the reasoning.
Question
- (Topic 2)
A company has negotiated a credit facility with the following terms:
$5,000,000 line of credit $3,000,000 average borrowing 30 basis point commitment fee on the unused portion of the line Interest rate on advances is 1-month LIBOR plus 4% 1-month LIBOR is currently 2% What is the annual interest rate on the line of credit?
Options
- A6.0%
- B6.2%
- C9.0%
- D9.3%
How the community answered
(43 responses)- A5% (2)
- B72% (31)
- C9% (4)
- D14% (6)
Community Discussion
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