Question
Minnerly Motors recently borrowed an equipment loan of $20,000 with a nominal discount interest rate of 12.5% with quarterly compounding that requires 10% compensating balance.
Minnerly Motors recently borrowed an equipment loan of $20,000 with a nominal discount interest rate of 12.5% with quarterly compounding that requires 10% compensating balance. What is the effective annual rate (EAR) of the loan assuming 365-day per year?
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Introductory Econometrics For Finance
Authors: Chris Brooks
2nd Edition
052169468X, 9780521694681
