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Calculating fees on a loan commitment

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Calculating Fees on a Loan Commitment

You have approached your local bank for a start-up loan commitment for $1,200,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = $1,200,000, term = 1 year, up-front fee = 20 basis points, back-end fee = 60 basis points. If you take down 85 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

Reference no: EM132395581

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