Question
The Dade Company is borrowing $395,000 for one year and paying $32,200 in interest to Miami National Bank. The bank requires a 22 percent compensating
The Dade Company is borrowing $395,000 for one year and paying $32,200 in interest to Miami National Bank. The bank requires a 22 percent compensating balance. The principal refers to funds the firm can effectively utilize.
- What is the effective rate of interest?
- What would be the effective rate if the company was required to make 12 monthly payments to retire the loan.
Do not copy from Chegg.
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Introduction To Corporate Finance
Authors: William L. Megginson, M.D. Lucey Brian C., Scott J. Smart, Scott B. Smart, Bill Megginson
1st Edition
184480562X, 9781844805624
