You've Worked Out a Line of Credit Arrangement That Allows

question 74

Multiple Choice

You've worked out a line of credit arrangement that allows you to borrow up to $55 million at any time.The interest rate is 0.55 percent per month.In addition,3 percent of the amount you borrow must be deposited in a non-interest-bearing account.Assume that your bank uses compound interest on its line-of-credit loans.Suppose you need $12 million today and you repay it in six months.How much interest will you pay?

• A)$387,567
• B)$413,902
• C)$421,028
• D)$441,414
• E)$442,886

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