A bank lends a firm $500,000 for one year at 8 percent and requires co
A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is ________.
A) 8.9 percent
B) 8 percent
C) 7.2 percent
D) 7.0 percent
ANSWER
A
Expert paper writers are just a few clicks away
Place an order in 3 easy steps. Takes less than 5 mins.