Tangshan Mining Borrowed $100,000 for One Year Under a Revolving

question 101

Multiple Choice

Tangshan Mining borrowed $100,000 for one year under a revolving credit agreement that authorized and guaranteed the firm access to $200,000. The revolving credit agreement had a stated interest rate of 7.5 percent and charged the firm a 1 percent commitment fee on the unused portion of the agreement. Based on this information, the effective annual interest rate on the loan was

• A) 7.5%.
• B) 8.0%.
• C) 8.5%.
• D) 9.0%.

---

Definitions:

IQ Scores

Numerical measures of an individual's intelligence level, typically based on standardized tests.

David Wechsler

A psychologist who developed several widely used intelligence tests, including the Wechsler Adult Intelligence Scale (WAIS) and the Wechsler Intelligence Scale for Children (WISC).

Alfred Binet

A French psychologist who, together with Theodore Simon, developed the first intelligence test known as the Binet-Simon scale.

Mental Age

A concept used in psychology to describe an individual's cognitive ability level in years, which may differ from their chronological age.