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We have a $500,000 line of credit with a 10% compensating balance. The quoted interest rate is 4.5%. We need $200,000 for inventory for one

  1. We have a $500,000 line of credit with a 10% compensating balance. The quoted interest rate is 4.5%. We need $200,000 for inventory for one year. What is the effective interest rate we are paying on this credit line?

    4.5%

    9.0%

    5.0%

    5.55%

    4.0%

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