You have approached your local bank for a start-up loan commitment for $290,000

Question

You have approached your local bank for a start-up loan commitment for $290,000 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 = $290,000, term = one year, up-front fee = 60 basis points, back-end fee = 80 basis points. Assume you take down 60 percent of the total loan commitment.

Calculate the total fees you will pay on this loan commitment.

Total Fees-

You have approached your local bank for a start-up loan commitment for $290,000 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 = $290,000, term = one year, up-front fee = 60 basis points, back-end fee = 80 basis points. Assume you take down 60 percent of the total loan commitment.

Explanation / Answer

Up Front Fees                   =             $290000*.0060                 =             $1740
Back End Fees                   =             $290000*.0080*.40          =             $928

Total                                                                                           =          $2668

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.