Ivanhoe, Inc., has just set up a formal line of credit of $10 million with First...

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Ivanhoe, Inc., has just set up a formal line of credit of $10million with First Community Commercial Bank. The line of credit isgood for up to five years. The bank will charge Ivanhoe an interestrate of 7.00 percent on any amount borrowed, and the firm will payan annual fee of 60 basis points on the unused balance. The firmborrowed $8.0 million on the first day the credit line becameavailable. What is the effective interest rate on this line ofcredit? (Round answer to 2 decimal places, e.g. 12.25%.)

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Ivanhoe Inc has set up a formal line of credit of 10 million with First Community Commercial Bank The firm borrowed 80 million on the first day the credit line became available There are two types See Answer

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