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Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual interest rate of 9.2%. The company is required to maintain a
Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual interest rate of 9.2%. The company is required to maintain a 14% compensating balance in its checking account. What is the effective interest rate on the loan? Assume the company would not normally maintain this average amount. (Use 360 days in a year. Round your answer to 2 decimal places.)
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