Question
On January 1, 2020, Bonita Industries borrows $2250000 from National Bank at 13% annual interest. In addition, Bonita is required to keep a compensatory balance
On January 1, 2020, Bonita Industries borrows $2250000 from National Bank at 13% annual interest. In addition, Bonita is required to keep a compensatory balance of $225000 on deposit at National Bank which will earn interest at 4%. The effective interest that Bonita pays on its $2250000 loan is:
| A. 13.5%. |
| B. | 13.0%. |
| C. | 14.0%. |
| D. | 8.0%. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals Of Business Mathematics In Canada
Authors: F. Ernest Jerome, Jackie Shemko
3rd Edition
1259370151, 978-1259370151
