Question: Problem2. [6 pts] Jordyn M. & Lindsay M. Surplus has a committed line of credit with a maximum of $1.2 million and interest rate of

Problem2. [6 pts] Jordyn M. & Lindsay M. Surplus has a

Problem2. [6 pts] Jordyn M. & Lindsay M. Surplus has a committed line of credit with a maximum of $1.2 million and interest rate of 3.5% (EAR). The loan has a commitment fee of 0.45% (EAR). If the firm borrows $900,000 at the start of the year and repays it at the end of the year, what is the total cost of the loan? (Show your calculations & cash flow on a timeline)

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