The York Company has arranged a line of credit that allows it to borrow up to...

 

Transcribed Image Text:

The York Company has arranged a line of credit that allows it to borrow up to $43 milion at any time. The interest rate is .619 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. What is the effective annual rate on this line of credit? The York Company has arranged a line of credit that allows it to borrow up to $43 milion at any time. The interest rate is .619 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. What is the effective annual rate on this line of credit?

Answer rating: 100% (QA)

Solution To find the effective annual rate on this line of credit we need to first calculat... View the full answer