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A firm borrowed $1,500,000 from National Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A
A firm borrowed $1,500,000 from National Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate.
c) What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in 3 equal monthly installments?
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