Digital Access Inc. needs $400,000 in funds for a project. (Assume the loan term is one year.)

a.	With a compensating balance requirement of 20 percent, how much will the firm need to borrow?

Amount to be borrowed

$

b.	Given your answer to part a and a stated interest rate of 9 percent on the total amount borrowed, what is the effective rate on the $400,000 actually being used? (Input your answer as a percent rounded to 2 decimal places.)

Effective rate of interest

%