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The loan is a discounted loan and requires a compensating balance of 5%. She is trying to calculate effective annual rate of interest on this

The loan is a discounted loan and requires a compensating balance of 5%. She is trying to calculate effective annual rate of interest on this loan if she borrowed $300,000 for one year at 7% interest.

A. 7.00%

b. 7.37%

c. 7.53%

d. 7.96%

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