Formal Line of Credit: Storm Electronics Has Set Up a Formal

question 42

Multiple Choice

Formal line of credit: Storm Electronics has set up a formal line of credit of $2 million with First Kentucky Bank. The line of credit is good for up to three years. The bank will be charging them an interest rate of 6.25 percent on the loan, and in addition the firm will pay an annual fee of 60 basis points on the unused balance. The firm borrowed $1,500,000 on the first day the credit line became available. What is the firm's effective interest rate on this line of credit? Round to two decimal places.

• A) 7.50%
• B) 6.45%
• C) 6.25%
• D) 7.15%

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Definitions:

Never-Married Single Mothers

Unmarried females who have given birth, pointing out a distinct form of familial configuration.

Family Support

Assistance, care, and encouragement provided by family members to each other, which plays a crucial role in individual well-being and development.

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The process of psychological and social development through the interaction with the social environment over the lifespan.

Person Adjustment

The process of adapting or accommodating oneself to handle challenges, changes, or demands in life effectively.