Brilliant Discoveries Inc. (BDI) utilizes interest rate caps to control financing costs. It paid $100,000 to cap a 5-year $10 million loan at 5%. Prime rate was below 5% in year one. The rates were 6%, 8%, 5 %, and 7% the subsequent years the loan was outstanding respectively. 

What was the average level of annual finance costs associated with the loan?

Answer rating: 100% (QA)

To calculate the average level of annual finance costs we need to first calculate the actual int... View the full answer