The Bensington Glass Company entered into a loan agreement with the firms bank to finance the firms
Question:
The Bensington Glass Company entered into a loan agreement with the firm’s bank to finance the firm’s working capital. The loan called for a floating rate that was 30 basis points (.30 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.2 percent and a minimum of 1.75 percent. Calculate the rate of interest for Weeks 2 through 10.
DateLIBOR
Week 1 .........1.98%
Week 2 .........1.66%
Week 3 .........1.52%
Week 4 .........1.35%
Week 5 .........1.60%
Week 6 .........1.63%
Week 7 .........1.67%
Week 8 .........1.88%
Week 9 .........1.93%
Step by Step Answer:
Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin