Carey Company is borrowing $250,000 for one year at 10.0 percent from Second Intrastate Bank. The bank requires a 18 percent compensating balance. The principal refers to funds the firm can utilize effectively (Amount borrowed - Compensating balance). a. What is the effective rate of interest? (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest % b. What would the effective rate be if Carey were required to make 12 equal monthly payments to retire the loan? (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest %

Carey Company is borrowing $250,000 for one year at 10.0 percent from Second Intrastate Bank The bank requires a 18 percent compensating balance. The principal refers to funds the firm can utilize effectively (Amount borrowed - Compensating balance) o. What is the effective rate of interest? (Use a 360 -day yeor. Input your onswer as a percent rounded to 2 decimal places.) b. What would the effective rate be if Carey were required to make 12 equal monthly payments to retire the loan? (Use a 360 -doy year. Input your answer os a percent rounded to 2 decimal ploces.)