Question: What interest rate would make it worthwhile to incur a compensating balance of $25,000 in order to get a 1-percent lower interest rate on a

What interest rate would make it worthwhile to incur a compensating balance of $25,000 in order to get a 1-percent lower interest rate on a 1-year, pure discount loan of $300,000? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

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

multiple choice

Yes

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