Starr Co Has Been Approved for a $100,000 Loan Commitment from from Its

Multiple Choice

Starr Co. has been approved for a $100,000 loan commitment from its local bank. The bank has offered the following terms: term = one year, up-front fee = 75 basis points, back-end fee = 25 basis points, and rate on the loan = 8.00 percent. Starr expects to immediately take down $80,000 and no more during the year unless there is some unforeseen need. What is the total interest and fees Starr can expect to pay on this loan commitment?

A) $7,050
B) $7,175
C) $7,200
D) $7,400