PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the
Question:
PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the loan is 12 percent. Calculate the APR and rEAR assuming the loan is a simple interest loan with
(a) No compensating balance requirement
(b) A 25 percent compensating balance requirement, and PAR currently holds no funds at the lending bank.
(c) How much would PAR have to borrow if it needed $150,000 to pay bills and the loan required a 25 percent compensating balance?
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a Interest each 60 days 01260360150000 3000 APR 002 x 6 012 120 r EAR 102 6 10 01262 ...View the full answer
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