Question

 ​(Floating-rate loans)  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

2929

basis points

​(0.290.29

​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

2.192.19

percent and a minimum of

1.721.72

percent. Calculate the rate of interest for weeks 2 through 10.

Date	LIBOR
Week 1	1.981.98​%
Week 2	1.631.63​%
Week 3	1.481.48​%
Week 4	1.371.37​%
Week 5	1.641.64​%
Week 6	1.631.63​%
Week 7	1.721.72​%
Week 8	1.941.94​%
Week 9	1.881.88​%

The rate of interest for week 2 is

nothing​%.

​(Round to two decimal​ places.)

Answer 1

In the question, there is a floor of 1.72% (minimum rate) and a cap of 2.19% (maximum rate)