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%.
Correct Answer:
Verified
Correct Answer:
Verified
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