Randall Corporation plans to borrow $$240,000$ for one year at $17$ percent from the Waco State Bank. There is a $24$ percent

compensating balance requirement. Randall Corporation keeps minimum transaction balances of $$20,000$ in the normal c

business. This idle cash counts toward meeting the compensating balance requirement.

What is the effective rate of interest?

Note: Use a $360-$day year. Input your answer as a percent rounded to $2$ decimal places.

Carey Company is borrowing $$350,000$ for one year at $15\mathrm{.}5$ percent from Second Intrastate Bank. The bank requires a $15$ percent

compensating balance. The principal refers to funds the firm can utilize effectively $($Amount borrowed $-$ Compensating balance$).$

a$.$ What is the effective rate of interest?

Note: Use a $360-$day year. Input your answer as a percent rounded to $2$ decimal places.

Effective rate of interest

$\%$

b$.$ What would the effective rate be if Carey were required to make $12$ equal monthly payments to retire the loan?

Note: Use a $360-$day year. Input your answer as a percent rounded to $2$ decimal places.

Effective rate of interest

$\%$