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Determine the actual annual interest rate on a $200,000 line of credit with an annual percentage rate of 8% compounded monthly. The bank requires that

Determine the actual annual interest rate on a $200,000 line of credit with an annual percentage rate of 8% compounded monthly. The bank requires that a 5% compensating balance be placed in an interest-bearing account that pays an annual percentage rate of 1.5% compounded monthly. The average daily balance is anticipated to be $105,000, excluding the compensating balance and interest due on the line of credit.

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