DeAngelo Bank offers your firm a discount interest loan with an interest rate of 8.7 percent for
Question:
DeAngelo Bank offers your firm a discount interest loan with an interest rate of 8.7 percent for up to $20 million, and in addition requires you to maintain a compensating balance of 4 percent against the amount borrowed. What is the effective annual interest rate on this lending arrangement?
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You will pay interest of Interest 20000000087 1740000 Additionally the compensating balance o...View the full answer
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Related Book For 
Corporate Finance Core Principles and Applications
ISBN: 978-1259289903
5th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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