Question: What interest rate would make it worthwhile to incur a compensating balance of $21,000 in order to get a 1 percent lower interest rate on

What interest rate would make it worthwhile to incur a compensating balance of $21,000 in order to get a 1 percent lower interest rate on a 1 year, pure discount loanof $280,000? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and roundyour answer to 2 decimal places.)

Interest rate %?

Is it worth incurring the compensating balance to obtain the lower rate?

Yes or No

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