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Diamond Trust Bank Ltd has offered a manufacturing company the following alternatives in response to the R275 000 one-year loan application made to the bank.
Diamond Trust Bank Ltd has offered a manufacturing company the following alternatives in response to the R275 000 one-year loan application made to the bank. alternative 1: 13% discount interest, with an 8% compensating balance. alternative 2: 16% simple interest with interest paid monthly. What will be the effective annual rate if this company chooses to take the cheaper alternative? 1. 13.63%. 2. 16.08%. 3. 16.46%. 4. 17.22%
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