Bank has granted the ABC company a secured overdraft for the coming quarter (91 days).The credit amount is limited to I million USD. The interest rate is 12% yearly and the arrangement fee si 1% to be paid up front.It is forecasted that the ABC company will be using for the Ist month (30 days) 50% of thesecured overdraft limit while in t h e further 2 months (61 days) 9 0 %of the established limit. Calculate the effective cost of secured overdraft borrowing cost.

Answer rating: 100% (QA)

To calculate the effective cost of the secured overdraft borrowing cost we need to consider the inte... View the full answer