Calculating Fees on a Loan Commitment You Have Approached Your

question 80

Multiple Choice

Calculating Fees on a Loan Commitment 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 = 1 year, up-front fee = 20 basis points, back-end fee = 50 basis points. If you take down 90 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

• A) $2,000
• B) $2,500
• C) $5,000
• D) d.$ 6,500

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Definitions:

Memory Consolidation

The process through which initial fragile memories are transformed into stable, long-term memories.

Encoding Specificity Principle

A principle stating that the recall of information is improved when the contexts present at encoding and at retrieval are the same.

Retrieval

Retrieval is the process of bringing information from stored memory back into conscious awareness, an essential part of the memory process in cognitive psychology.

Acquisition

Acquisition refers to the initial stage of learning or conditioning in which a response is first established.