Come and Go Bank offers your firm a discount interest loan with an interest rate of 7
Question:
Come and Go Bank offers your firm a discount interest loan with an interest rate of 7 percent for up to $20 million, and in addition requires you to maintain a 4 percent compensating balance against the face amount borrowed. What is the effective annual interest rate on this lending arrangement?
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Related Book For 
Essentials of Corporate Finance
ISBN: 978-0078034756
8th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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