?a. If a firm borrows $10,000,000 from a bank at 12% and pays an origination fee of 10%. What is the rate of interest if the firm borrows the full amount for the entire year? ? b. If a firm borrows $10,000,000 from a bank at 12%, discounted in advance, what is the rate of interest if the firm borrows the full amount for the entire year?
What will be an ideal response?
i = $1,200,000 = 13.3%
$10,000,000 ? $1,000,000?i = $1,200,000 = 13.33% $10,000,000 ? $1,000,000
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