Cheap Money Bank offers your firm a discount interest loan at 8.25 percent for up to $25
Question:
Cheap Money Bank offers your firm a discount interest loan at 8.25 percent for up to $25 million and, in addition, requires you to maintain a 5 percent compensating balance 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 250000000825 Interest 2062500 Additionally the compensating balan...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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