Question: 1. Data Back-Up Systems has obtained a $10,000, 90-day discounted bank loan at an annual interest rate of 14%, payable at maturity. a. How much

1. Data Back-Up Systems has obtained a $10,000, 90-day discounted bank loan at an annual interest rate of 14%, payable at maturity.

a. How much interests (in dollars) will the firm pay on the 60-day loan?

b. Find the effective 90-day rate on the loan.

c. Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances.

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