Cray Computing needs a 6 - month loan for $ 3 0 0 , 0 0 0

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Question:

Cray Computing needs a

6 -

month loan for $

300, 000 .

Its bank quotes a simple interest rate of

11 %

on the loan.

.)

What is the annual percentage rate

(

APR

)

if there is a compensating balance requirement of

30 %

of the loan amount?

.)

What is the effective annual rate

(

EAR

)

if there is a compensating balance requirement of

30 %

of the loan amount?

Related Book For answer-question

Personal Financial Planning

ISBN: 9781439044476

12th Edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley

See More Books

Posted Date: Mar 18, 2024 06:59 AM

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Cray Computing needs a 6 - month loan for $ 3 0 0 , 0 0 0

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Expert Answer:

a To calculate the Annual Percentage Rate APR when there is a compensating balance requirement we ne... View the full answer

Personal Financial Planning

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