PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the

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PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the loan is 12 percent. Calculate the APR and r_EAR assuming the loan is a simple interest loan with

(a) No compensating balance requirement

(b) A 25 percent compensating balance requirement, and PAR currently holds no funds at the lending bank.

(c) How much would PAR have to borrow if it needed $150,000 to pay bills and the loan required a 25 percent compensating balance?

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ISBN: 978-1305666870

5th edition

Authors: Scott Besley, Eugene Brigham

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Question Posted: Feb 21, 2020 10:12 AM

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PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the

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a Interest each 60 days 01260360150000 3000 APR 002 x 6 012 120 r EAR 102 6 10 01262 ...View the full answer

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