Question: What interest rate would make it worthwhile to incur a compensating balance of $ 1 2 , 0 0 0 in order to get a

What interest rate would make it worthwhile to incur a compensating balance of $12,000 in order to get a 0.65-percent lower interest rate on a 2-year, pure discount loan of $195,000?
Is it worth incurring the compensating balance to obtain the lower rate?
What interest rate would make it worthwhile to incur a compensating

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $15,000 in order to get a 0.65-percent lower interest rate on a 2-year, pure discount loan of $225,000? b. Is it...

Q:

What interest rate would make it worthwhile to incur a compensating balance of $ 1 5 , 5 0 0 in order to get a 0 . 6 5 - percent lower interest rate on a 2 - year, pure discount loan of $ 2 3 0 , 0 0...

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $12,500 in order to get a 0.65-percent lower interest rate on a 2-year, pure discount loan of $200,000? b. Is it...

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $26,000 in order to get a 1-percent lower interest rate on a 1-year, pure discount loan of $305,000 ? b. Is it worth...

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $12,000 in order to get a 1-percent lower interest rate on a 1-year, pure discount loan of $235,000 ? b. Is it worth...

Q:

What interest rate would make it worthwhile to incur a compensating balance of $ 1 2 , 0 0 0 in order to get a 0 . 6 5 - percent lower interest rate on a 2 - year, pure discount loan of $ 1 9 5 , 0 0...

Q:

a . What Interest rate would make it worthwhile to Incur a compensating balance of $ 1 5 , 5 0 0 in order to get a 0 . 6 5 - percent lower Interest rate on a 2 - year, pure discount loan of $ 2 3 0 ,...

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $15,500 in order to get a 0.65 -percent lowe interest rate on a 2 -year, pure discount loan of $230,000 ? b. Is it...

Q:

a. What interest rate would make it worthwhile to incur a compensating balance of $15,000 in order to get a 1-percent low interest rate on a 1-year, pure discount loan of $250,000 ? b. Is it worth...

Q:

1. What interest rate would make it worthwhile to incur a compensating balance of $12,000 in order to get a 1 percent lower interest rate on a 1 year, pure discount loan of $235,000? (Negative amount...

Q:

On January 1, 2009, Moody Company leased a warehouse for $20,000 per year. The first annual payment is due December 31, 2009. The present value of the lease payments, which is also the fair value of...

Q:

You need to write the Current average national income/ current GDP of USA and describe the factors that affect the GDP of USA

Q:

16. Define internal control.

Q:

Bincangkan falsafah di sebalik filem kung fFu panda 1 dan kaitkan dengan falsafah praktikal dalam kehidupan anda sebagai pelajar dan pekerja

Q:

Explain the issues of safety unique to small businesses.

Q:

Describe downsizing.

Q:

Discuss compensation for contingent workers.