Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The average amount of inventory is $4,000,000, the bank will loan at 5.5 % per annum for the 6-week loan. The loan amount will be against 70 percent of the value of the inventory, and the public warehouse fee is $2,500 per week. Total transportation cost for the loan period is 1.5 percent of the average value of the inventory [that is, (0.015)($4,000,000)].

Find period rate

Find m

Find the annual percentage rate (APR)

Find the effective annual cost (EAR)