ABC Corporation receives a letter of credit for 90 days from Republic Bank of New York to guarantee payment of $1.35 million for shipment of goods from an Italian manufacturer. Republic Bank charges a fee of 0.75 percentage points on the face value of the credit letter in return for its services of issuing the letter and, if properly presented, accepting a draft for payment that will eventually be sent by the foreign manufacturer. What is the total amount of the fee that ABC must pay Republic Bank for this service?

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The Answer of ABC Corporation receives a letter of credit for 90 days from Republic Bank of New York to guarantee payment of $1.35 million for shipment of goods from an Italian manufacturer. Republic Bank charges a fee of 0.75 percentage points on the face value of the credit letter in return for its services of issuing the letter and, if properly presented, accepting a draft for payment that will eventually be sent by the foreign manufacturer. What is the total amount of the fee that ABC must pay Republic Bank for this service?

ABC Corporation Receives a Letter of Credit for 90 Days