A company will pay interest in the amount of $375,000 if $8,000,000 is borrowed from a line of credit. If the company would be required to maintain a $300,000 compensating balance and pay an up-front commitment fee of $7,000, what would be the effective annual interest rate on the lending arrangement?

Answer rating: 100% (QA)

To calculate the effective annual interest ratewe need to consider all the costs associated with the ... View the full answer