Problem:
The ABC Company paid total interest of $2,000 on its line of credit borrowings for the year. ABC paid a $100 commitment fee on an average borrowing of $20,000 for the year.
Required:
Question: What is ABC's annual effective rate of interest?A=
- 9.95%
- 10.00%
- 10.50%
- 12.71%
Note: Please show how you came up with the solution.