Uncle Ben Inc. arranged a P9,000,000 revolving credit agreement with a group of banks. The firm paid an annual commitment fee of 0.5% of the unused balance of the loan commitment. On the used portion...

During computation, you may round your integer data to two decimal places and your percentages and present value factors to four decimal places.


Extracted text: Uncle Ben Inc. arranged a P9,000,000 revolving credit agreement with a group of banks. The firm paid an annual commitment fee of 0.5% of the unused balance of the loan commitment. On the used portion of the revolver, it paid 1.5% above prime for the funds actually borrowed on a simple interest basis. The prime rate was 8% during the year. If the firm borrowed P7,000,000 immediately after the agreement was signed and repaid the loan at the end of one year, what was the effective cost of the agreement? (Please answer this percentage in amount with two decimal points e.g. xx.Xx; do not denote percentage anymore)