Question: Digital Access Inc. needs $400,000 in funds for a project. (Assume the loan term is one year.) a. With a compensating balance requirement of 20

Digital Access Inc. needs $400,000 in funds for a project. (Assume the loan term is one year.)

a.

With a compensating balance requirement of 20 percent, how much will the firm need to borrow?

Amount to be borrowed $

b.

Given your answer to part a and a stated interest rate of 9 percent on the total amount borrowed, what is the effective rate on the $400,000 actually being used? (Input your answer as a percent rounded to 2 decimal places.)

Effective rate of interest %

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