The treasurer for the Macon Blue Sox baseball team is seeking a $20,000 loan for one year
Question:
The treasurer for the Macon Blue Sox baseball team is seeking a $20,000 loan for one year from the 4th National Bank of Macon. The stated interest rate is 10 percent, and there is a 15 percent compensating balance requirement.
The treasurer always keeps a minimum of $1,500 in the baseball team’s checking accounts. These funds count toward meeting any compensating balance requirements. What will be the effective rate of interest on this loan?
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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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