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a. What interest rate would make it worthwhile to incur a compensating balance of $16,000 in order to get a 1-percent lower interest rate

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a. What interest rate would make it worthwhile to incur a compensating balance of $16,000 in order to get a 1-percent lower interest rate on a 1-year, pure discount loan of $255,000? b. Is it worth incurring the compensating balance to obtain the lower rate?

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