Calculating Fees on a Loan Commitment You Have Approached Your

question 70

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 = one 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)$1,000
• B)$1,080
• C)$1,600
• D)$2,520

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