Thompson Inc. has a $10 million revolving credit agreement with its bank. It pays interest on borrowing

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Thompson Inc. has a $10 million revolving credit agreement with its bank. It pays interest on borrowing at 2% over prime and a .25% commitment fee on available but unused funds. Last month Thompson had borrowings of $5 million for the first half of the month and $10 million for the second half. Calculate its interest charges for the month. The bank’s prime rate is 6%.


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