LIBOR last week was 1.88%, this week it is 1.91%. SC Corp. has borrowed $1,000,000 from North Pole Bank at a rate of one half a percentage point above LIBOR with cap of 2.5% and a floor of 2.0%. What interest was charged to SC last week?

Question

Quizplus · Accepted Answer

Since SC Corp. borrowed at a rate of half a percentage point above LIBOR, the interest rate charged last week would be 1.88% + 0.5% = 2.38%. This is within the cap and floor limits, so the interest charged is 2.38%.

LIBOR Last Week Was 1