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Digital Access Incorporated needs $343,900 in funds for a project. Assume the loan term is one year. a. With a compensating balance requirement of 5

Digital Access Incorporated needs $343,900 in funds for a project.

Assume the loan term is one year.

a. With a compensating balance requirement of 5 percent, how much will the firm need to borrow?

b. Given your answer to part a and a stated interest rate of 20 percent on the total amount borrowed, what is the effective rate on the $343,900 actually being used?

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