Question
The Ohio Valley Steel Corporation has borrowed $8 million for one month at a stated annual rate of 7% (APR, compounded monthly), using inventory stored
The Ohio Valley Steel Corporation has borrowed $8 million for one month at a stated annual rate of 7% (APR, compounded monthly), using inventory stored in a field warehouse as collateral. The warehouse charges a $8,000 fee, payable at the end of the month. What is the effective annual rate of this loan?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
