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ABC 's bank offers two borrowing options ( 1 ) a discount interest loan with a quoted rate equal to 8.0% and that requires a

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ABC 's bank offers two borrowing options ( 1 ) a discount interest loan with a quoted rate equal to 8.0% and that requires a 10.0% compensating balance and (2) a simple interest loan with a 9.5% interest rate and no compensating balance. ABC tries to maintain a checking account balance close to $0 at the bank. If ABC needs a one-year loan, based on the EAR which option should it choose? Show the computations

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