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Cheap Money Bank offers your firm a discount interest loan at 7 percent for up to $20 million and, in addition, requires you to maintain

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Cheap Money Bank offers your firm a discount interest loan at 7 percent for up to $20 million and, in addition, requires you to maintain a 4 percent compensating balance against the amount borrowed. What is the effective annual interest rate on this lending arrangement? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual interest rate | %

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