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Bank charges a back-end fee

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Assume a bank makes a loan commitment to the value of $10 million at a fixed interest rate of 10% per annum for a period of one year. Assume the borrower only uses 50% of the provided funds over the course of the year. If the bank charges a back-end fee of 0.5%, what is the additional revenue the bank would generate?

Reference no: EM132525451

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