Randall Corporation plans to borrow $200,000 for one year at 8 percent from the Dominion Trust Company.

Question:

Randall Corporation plans to borrow $200,000 for one year at 8 percent from the Dominion Trust Company. There is a 20 percent compensating balance requirement. Randall keeps minimum transaction balances of$10,000 in the normal course of business. This idle cash counts toward meeting the compensating balance requirement. What is the annual rate of interest?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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