You Have Approached Your Local Bank for a Start-Up Loan

Multiple Choice

You have approached your local bank for a start-up loan commitment for $175,000 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 = $175,000, term = one year, up-front fee = 75 basis points, back-end fee = 80 basis points. If you take down 75 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

A) $2,712.50
B) $1,312.50
C) $1,550.00
D) $1,662.50