During the Last Year You Have Had a Loan Commitment

question 26

Multiple Choice

During the last year you have had a loan commitment from your bank to fund inventory purchases for your small business. The total line available was $500,000, of which you took down $300,000. It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $300,000) of $5,000 on this loan commitment. You remember that the up-front fee was 75 basis points. What is the back-end fee on this loan commitment?

• A) 6 basis points
• B) 62.5 basis points
• C) 75 basis points
• D) 2.5 basis points

---

Definitions:

Cold

Typically refers to low temperatures; contextually, it can relate to a common viral infection affecting the nose and throat.

Pain

A distressing physical and emotional sensation linked to real or possible harm to the body, or expressed through the lens of such harm.

Rubber-Hand Illusion

A psychological experiment that demonstrates how sensory and visual cues can lead to a false perception of body ownership.

Sensory Interaction

The process by which multiple senses, such as sight and sound, work together to give a more comprehensive understanding of the environment.