One Stop Has Been Approved for a $55,000 Loan Commitment

question 79

Multiple Choice

One Stop has been approved for a $55,000 loan commitment from its local bank. The bank has offered the following terms: term = 1 year, up-front fee = 85 basis points, back-end fee = 35 basis points, and rate on the loan = 9.75%. Casey's expects to immediately take down $45,000 and no more during the year unless there is some unforeseen need. Calculate the total interest and fees Casey's One Stop can expect to pay on this loan commitment.

• A) $5,050
• B) $5,115
• C) $4,890
• D) $4,650

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Definitions:

Abnormal Behavior

Actions, thoughts, or emotions that are unusual within a person’s own culture, cause personal distress, or interfere with a person’s ability to function in daily life.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, which increases or decreases the likelihood of a behavior being repeated.

Classical Conditioning

A learning mechanism in which a neutral stimulus becomes associated with an innately meaningful stimulus and acquires the capacity to elicit a similar response.

Rewards

Incentives or positive reinforcements given to encourage certain behaviors or outcomes.