AFP
CTP · Question #481
CTP Question #481: Real Exam Question with Answer & Explanation
Sign in or unlock CTP to reveal the answer and full explanation for question #481. The question stem and answer options stay visible for context.
Question
- (Topic 5) A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company's compensating balances are funded from credit-line borrowings. What is the effective annual interest rate on the net usable funds?
Options
- A10.00%
- B10.25%
- C10.31%
- D10.57%
Unlock CTP to see the answer
You've previewed enough free CTP questions. Unlock CTP for full answers, explanations, the timed quiz mode, progress tracking, and the master PDF. Question stem and options stay visible so you can still see what's on the exam.