Katie's Karate Dojo Has a Commited Line of Credit with a Maximum

question 53

Multiple Choice

Katie's Karate Dojo has a commited line of credit with a maximum of $350,000 and interest rate of 6% (EAR) .The loan has a commitment fee of 0.5% (EAR) .If the firm borrows $300,000 at the start of the year and repays it at the end of the year,what is the total cost of the loan?

• A) $18,000
• B) $18,250
• C) $19,500
• D) $21,250
• E) $21,000

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Definitions:

Introverted

Describing a person predominantly concerned with their own thoughts and feelings rather than with external things.

Extraversion

A personality trait characterized by orientation towards the external environment and enjoyment from engaging in social interactions, as opposed to introversion.

Big Five

A model describing five major personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Extraversion

A personality trait characterized by outgoingness, sociability, and a high level of activity.