1A)

B)

Metrobank offers one year loans with a 16 percent stated rate, charges a 1/4 percent loan origination fee, imposes a 6 percent compensating balance requirement, and must pay a 5 percent reserve requirement to the Federal Reserve. What is the return to the bank on these loans? (Do not round Intermediate calculations. Round your answer to 1 decimal place. (e... 32.1)) Rate of return Countrybank offers one-year loans with a stated rate of 17 percent but requires a compensating balance of 11 percent. What is the true cost of this loan to the borrower? (Round your answer to 2 decimal places. (e.g., 32.16)) True cost