Purchase Solution

# Interest on Eurodollar loan

Not what you're looking for?

A US company CTM borrows \$1,500,000 at LIBOR + 125bp p.a. on a 6M rollover basis from a London bank. If 6M LIBOR is 4 1/2% over the 1st 6M interval and 5 3/8% over the 2nd 6M interval, how much will CTM pay in interest over the 1st year of its Eurodollar loan?

##### Solution Summary

The solution calculates Interest on Eurodollar loan borrowed on a 6M rollover basis from a London bank.

##### Solution Preview

125 bp= 1.25% %

interest payment for first half year
Principal \$15,000,000
LIBOR= 4.50%
Therefore interest ...

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.