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Question 2 A building contractor needs to borrow RM500,000 for six months. He is considering a loan from two banks: 1. United Overseas Bank offers

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Question 2 A building contractor needs to borrow RM500,000 for six months. He is considering a loan from two banks: 1. United Overseas Bank offers a simple interest loan of 11% with a required compensating balance 2. Southern Bank offers a discounted loan at an interest rate of 12% with a 10% compensating of 15%. balance. Required: Which loan should the contractor choose

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