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%.

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Definitions:

SAT Math Scores

The quantitative section scores of the Scholastic Aptitude Test, which assess mathematical reasoning and aptitudes.

Significance Level

The threshold for determining the statistical significance of an experiment or study, often denoted by alpha (α), representing the probability of rejecting the null hypothesis when it is true.

Null Hypothesis

A hypothesis that there is no significant difference or effect, serving as the default assumption to be tested against an alternative hypothesis in statistical analysis.

Population Means

The average value of a particular characteristic across the entire population studied.