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Question
A bank has a prime rate of 6 percent for its best customers. It has determined that the default risk premium for a particular customer is 0.4 percent and the term-risk premium for this loan is 0.25 percent. If this customer wants to borrow $5.0 million from the bank, how much in interest will this customer pay in one year?
A. $332,500
B. $665,000
C. $300,000
D. $320,000
E. None of the options is correct.
Answer
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Related questions
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