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( Related to Checkpoint 1 8 . 2 ) ( Estimating the cost of bank credit ) Paymaster Enterprises has arranged to finance its seasonal
Related to Checkpoint Estimating the cost of bank credit Paymaster Enterprises has arranged to finance its seasonal workingcapital needs with a shortterm bank loan. The loan will
carry a rate of percent per annum with interest paid in advance discounted In addition, Paymaster must maintain a minimum demand deposit with the bank of percent of the loan balance
throughout the term of the loan. If Paymaster plans to borrow $ for a period of months, what is the annualized cost of the bank loan?
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