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Jumbo Enterprises plans to borrow R1 000 000 for one year. The stated interest rate is 15% per annum. Required: Use the information provided above

Jumbo Enterprises plans to borrow R1 000 000 for one year. The stated interest rate is 15% per annum.

Required:

Use the information provided above to calculate the effective interest rate if:

4.3.1 The interest is discounted

4.3.2 There is a 25% compensating balance requirement

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