AG Fnewconnect.mheducati A6 Help SAVO Seve & Exit Submi Check my work Problem 8-26 Competing terms from banks [LO8-2] Summit Record Company is negotiating with two banks for a $158,000 loan Fidelity Bank requires a compensating balance of 16 percent, discounts the loan, and wants to be paid back in four quarterly payments. Southwest Bank requires a compensating balance of 8 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. The stated rate for both banks is 10 percent. Compensating balances will be subtracted from the $158,000 in determining the available funds in part a a-1. Calculate the effective interest rate for Fidelity Bank and Southwest Bank (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Effective Rate of Interest 21.62% Fidelity Bank 2007 % Southwest Bank Southwest Bank O Fidelity Bank b. Recompute the effective cost of interest, assuming that Summit ordinarily maintains $25,280 at each bank in deposits that will serve as compensating balances. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places) ces Effective Rate of Interest % Fidelity Bank Southwest Bank % Dan 70 10 Next > AM ING 23C Have 4/1/2000 e to search