A bank lends a firm $1,000,000 for one year at 12 percent on a discounted basis...

Transcribed Image Text:

A bank lends a firm $1,000,000 for one year at 12 percent on a discounted basis and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is_______ A. 12 percent B. 13.3 percent C. 13.6 percent D. 15.4 percent A bank lends a firm $1,000,000 for one year at 12 percent on a discounted basis and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is_______ A. 12 percent B. 13.3 percent C. 13.6 percent D. 15.4 percent

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Ob... View the full answer