Calculating Fees on a Loan Commitment You Have Approached Your

question 23

Multiple Choice

Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $500,000 needed to open a furniture 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 = $500,000, term = 1 year, up-front fee = 30 basis points, back-end fee = 60 basis points, and rate on the loan = 10%. If you immediately take down $250,000 and no more during the year, what is the total interest and fees you have paid on this loan commitment?

• A) $27,250
• B) $28,000
• C) $29,500
• D) $53,000

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Definitions:

Psychological Distress

A state of emotional suffering typically characterized by symptoms such as anxiety, depression, and stress, which can affect an individual's overall well-being.

Dignity-Conserving

Approaches or practices aimed at preserving the self-respect and worth of individuals, particularly in healthcare settings.

Thanatology

Study of death and dying.

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Individuals from whom one is descended, often considered in the context of family lineage or evolutionary history.