Problemyou have approached your local bank for a start-up, Ask an Expert

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Problem:

You have approached your local bank for a start-up loan commitment for $1,000,000 needed to open an auto 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 = $1,000,000, term = one year, up-front fee = 20 basis points, back-end fee = 50 basis points.

Required:

Question: If you take down 90 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

Note: Please provide step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167791

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