Question
Cheap Money Bank offers your firm a discount interest loan with an interest rate of 10 percent for up to $22 million, and in addition
Cheap Money Bank offers your firm a discount interest loan with an interest rate of 10 percent for up to $22 million, and in addition requires you to maintain a 4 percent compensating balance against the face amount borrowed. What is the effective annual interest rate on this lending arrangement?
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Analysis for Financial Management
Authors: Robert Higgins
11th edition
77861787, 978-0077861780
