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Accounting

Problem:

The ABC Company paid total interest of $2,000 on its line of credit borrowings for the year. ABC paid a $100 commitment fee on an average borrowing of $20,000 for the year.

Required:

Question: What is ABC's annual effective rate of interest?A=

9.95%
10.00%
10.50%
12.71%

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171415

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