Multiple Choice
Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund inventory purchases for your small business.The total line available was $500,000,of which you took down $400,000.It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees.You have misplaced the paperwork that listed the terms of the commitment,but you know you paid total fees (this does not include any interest paid to borrow the $400,000) of $1,750 on this loan commitment.You remember that the up-front fee was 25 basis points.What is the back-end fee on this loan commitment?
A) 5 basis points
B) 50 basis points
C) 10 basis points
D) 20 basis points
Correct Answer:
Verified
Correct Answer:
Verified
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