Calculating Fees on a Loan Commitment You Have Approached Your

question 47

Multiple Choice

Calculating Fees on a Loan Commitment 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 = 1 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) $1000
• B) $1080
• C) $1600
• D) $2520

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Definitions:

Computer Code

A set of instructions written in a programming language that is executed by a computer to perform specific tasks.

Software Project

A software project is a set of activities undertaken to develop, test, and maintain software applications or systems, often involving tasks such as coding, debugging, and project management.

Agent

An entity or person authorized to act on behalf of another, often in business or legal matters, to achieve certain goals or perform specific tasks.

Enterprises

Large organizations or businesses, usually comprising multiple departments or units, and engaged in professional, commercial, or industrial activities.