Question: a. What interest rate would make it worthwhile to incur a compensating balance of $12,500 in order to get a 0.65-percent lower interest rate on

a. What interest rate would make it worthwhile to incur a compensating balance of $12,500 in order to get a 0.65-percent lower interest rate on a 2-year, pure discount loan of $200,000? b. Is it worth incurring the compensating balance to obtain the lower rate?

a. What interest rate would make it worthwhile to incur a compensating balance of $12500 in order to get a 065 -percent lower interest rate on a 2 -year, pure discount loan of $200,000 ? b. Is it worth incurring the compensating balance to obtain the lower rate

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