Question
Paymaster Enterprises has arranged to finance its seasonalworking-capital needs with ashort-term bank loan. The loan will carry a rate of 15 percent per annum with
Paymaster Enterprises has arranged to finance its seasonalworking-capital needs with ashort-term bank loan. The loan will carry a rate of 15 percent per annum with interest paid in advance(discounted). Inaddition, Paymaster must maintain a minimum demand deposit with the bank of 11 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow $80,000 for a period of 6 months, what is the annualized cost of the bankloan?
The annualized cost of the bank loan is __ % ?
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MIS Management Information Systems
Authors: Hossein Bidgoli
8th edition
978-1337406932, 1337406937, 978-1337406925, 1337406929, 978-0357004357
