Pedro Gil Company must maintain a compensating balance of P50,000 in its checking account as one of
Fantastic news! We've Found the answer you've been seeking!
Question:
Pedro Gil Company must maintain a compensating balance of P50,000 in its checking account as one of the conditions of its short-term 6% bank loan of P500,000. Pedro Gil’s checking account earns 2% interest. Ordinarily, Pedro Gil would maintain a P20,000 balance in the account for transaction purposes. What is the loan’s approximate effective interest rate?
Related Book For
Contemporary financial management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date: