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Cray Computing needs a 6 - month loan for $ 3 0 0 , 0 0 0 . Its bank quotes a simple interest rate

Cray Computing needs a

6 -

month loan for $

300, 000 .

Its bank quotes a simple interest rate of

11 %

on the loan.

.)

What is the annual percentage rate

(

APR

)

if there is a compensating balance requirement of

30 %

of the loan amount?

.)

What is the effective annual rate

(

EAR

)

if there is a compensating balance requirement of

30 %

of the loan amount?

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