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A bank lends a firm P5,000,000 for one year at 12 percent on a discounted basis and requires compensating balances of 10 percent of the
A bank lends a firm P5,000,000 for one year at 12 percent on a discounted basis and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is
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6.41 percent.
7.69 percent.
6.67 percent.
15.38 percent.
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