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CTP · Question #678
(Topic 7) A company issues $5 million of commercial paper at a discount for 60 days. The interest cost is $85,000. The backup line fee for this transaction is $2,000, and the dealer fee is $1,000…
The correct answer is D. 10.89%. See the full explanation below for the reasoning.
Question
- (Topic 7)
A company issues $5 million of commercial paper at a discount for 60 days. The interest cost is $85,000. The backup line fee for this transaction is $2,000, and the dealer fee is $1,000. What is the annual interest rate?
Options
- A10.56%
- B10.71%
- C10.74%
- D10.89%
How the community answered
(48 responses)- A6% (3)
- B8% (4)
- C2% (1)
- D83% (40)
Community Discussion
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