You Have Approached Your Local Bank for a Start-Up Loan

question 65

Multiple Choice

You have approached your local bank for a start-up loan commitment for $200,000 needed to open a computer 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 = $200,000, term = one year, up-front fee = 50 basis points, back-end fee = 80 basis points. If you take down 95 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

• A) $1,000
• B) $1,080
• C) $1,600
• D) $2,520