Randall Corporation plans to borrow $200,000 for one year at 12 percent from the Waco State Bank.
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Randall Corporation plans to borrow $200,000 for one year at 12 percent from the Waco State Bank. There is a 20 percent compensating balance requirement.
Randall Corporation keeps minimum transaction balances of $10,000 in the normal course of business. This idle cash counts toward meeting the compensating balance requirement. What is the effective rate of interest?
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Related Book For 
Foundations Of Financial Management
ISBN: 9780073295817
12th Edition
Authors: Stanley B Block, Geoffrey A Hirt
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