accounting task

Project Description:

problem: on january 2, city hospital established a line of credit with first union national bank. the terms of the line of credit called for a $400, 00 minimum loan with an interest rate of 6 %. the compensating balance requirement is 5% of the total line of credit (with no additional fees charged).

a. what is the effective rate interest rate for city hospital if 50% of the total amount were used during the year?

b. what is the effective interest rate if only 24% of the total loan were used during the year?

c. how would the answer to “a” change if the additional fees were $500.00?

d. how would the answer to “b” change if the additional fees were a $1000
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