I am just giving the mocks a second-look after completing them last week and noticed this particular question (although I got it right, is different from my personal calcs)
I calculated the cost of the credit line by taking the 4k comm fee / 12 = $ 333.33
Interest @ 6% for the month: $10,000
Then took: $10,333.33 / 2,000,000 then X 12 for a rate of 6.2%. The solution says it is actually 6.5%
My way still helped me get the correct answer of A as the BA’s rate was still lower but the solution somehow calcs the pro-rated commitment fee as 0.005?! Where are they getting this?
Clearly I am missing something.
Thanks in advance.