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BMI Ltd. had arranged with the bank for a 6 month line of credit of...

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Accounting

BMI Ltd. had arranged with the bank for a 6 month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges commitment fee of 0.5% annually on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months.

Answer the following:

b. On the BMI Line of Credit: what is the total commitment fee charged:

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