The bank has granted an overdraft facility to ABC company for the period. The overdraft facility...

  

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The bank has granted an overdraft facility to ABC company for the period. The overdraft facility amount is USD 3700000. The interest rate on the overdraft facility taken is 15% per annum, and the overdraft facility commission is set at 3% and is to be paid in advance. It is anticipated that within the first period (i.e. 140 days), the company will benefit from USD 985000 of the overdraft facility granted, and within the next 130 days from USD 785000 of the overdraft facility granted. Calculate the effective annual cost of using the overdraft facility by the company. The bank has granted an overdraft facility to ABC company for the period. The overdraft facility amount is USD 3700000. The interest rate on the overdraft facility taken is 15% per annum, and the overdraft facility commission is set at 3% and is to be paid in advance. It is anticipated that within the first period (i.e. 140 days), the company will benefit from USD 985000 of the overdraft facility granted, and within the next 130 days from USD 785000 of the overdraft facility granted. Calculate the effective annual cost of using the overdraft facility by the company.