Solicitous Bank offers your firm an 8 percent discount interest loan for up to ($3) million, and

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Solicitous Bank offers your firm an 8 percent discount interest loan for up to $$3$ million, and in addition requires you to maintain a 6 percent compensating balance against the amount borrowed.

What is the effective annual interest rate on this lending arrangement? What would the EAR be if the bank also required an up-front commitment fee of

.10 percent of the line?

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Fundamentals Of Corporate Finance

ISBN: 9780072313000

5th Edition

Authors: Stephen A Ross, Randolph W Westerfield

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Question Posted: May 24, 2024 03:01 AM

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Solicitous Bank offers your firm an 8 percent discount interest loan for up to ($3) million, and

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Fundamentals Of Corporate Finance

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