Question: What interest rate would make it worthwhile to incur a compensating balance of $10,000 in order to get a 1 percent lower interest rate on

What interest rate would make it worthwhile to incur a compensating balance of $10,000 in order to get a 1 percent lower interest rate on a 1-year, pure discount loan of $225,000? (Negative amount should be indicatedby a minus sign. Round your answer to 1 decimal place.)

Interest rate

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

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