Question: Your company has agreed to a $400 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.47 percent per quarter

Your company has agreed to a $400 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.47 percent per quarter on any funds borrowed and maintain a 4 percent compensating balance on any funds borrowed at zero percent interest. What is the effective annual interest rate on this line of credit?

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