A bank has a prime rate of 6 percent for its best customers.It has determined that the default risk premium for a particular customer is 0.4 percent and the term-risk premium for this loan is 0.25 percent.If this customer wants to borrow $5.0 million from the bank,how much in interest will this customer pay in one year?
A) $332,500
B) $665,000
C) $300,000
D) $320,000
E) None of the options is correct.
Correct Answer:
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