Question

The Bensington Glass Company entered into a loan agreement with the​ firm's bank to finance the​ firm's working capital. The loan called for a floating rate that was

28 basis points (0.28 percent) over an index based on LIBOR. In​ addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.25 percent and a minimum of 1.75 percent. Calculate the rate of interest for weeks 2 through 10.

Date    LIBOR

Week 1 1.96%

Week 2 1.61%

Week 3 1.51%

Week 4 1.32%

Week 5 1.57%

Week 6 1.66%

Week 7 1.74%

Week 8 1.93%

Week 9 1.91%

Answer 1

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week = 0eek 6ate +0,88%lo .66 +0.88% 1.94 oeek 7ate +o.88% 4,93 % +0,a8% week ate : 2. 21% 1,1% 40,88% oeek gvote +0.88% week 9ate 2.19% -LOcek 1o ate 0,88 919to98% week ate +o