Question: Assume Dans Drums borrowed $19 million from Need It Now Bank and agreed to (a) Pay an interest rate of 7.1% (b) Maintain a compensating

Assume Dan’s Drums borrowed $19 million from Need It Now Bank and agreed to
(a) Pay an interest rate of 7.1%
(b) Maintain a compensating balance amount equal to 5.8% of the loan.
Determine Dan’s Drums actual effective interest rate on this loan.

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