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Def, Inc. requires $540,000 in short-term credit and is currently arranging a loan with its bank. ABC plans to use funds for six months; the
Def, Inc. requires $540,000 in short-term credit and is currently arranging a loan with its bank. ABC plans to use funds for six months; the annual rate on the loan is 5%, and the bank will require a 10% compensating balance. If ABC must have loan proceeds of $540,000, then it must borrow? What is the annual percentage cost of the loan, to the nearest .01%
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