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What interest rate would make it worthwhile to incur a compensating balance of $ 1 2 , 0 0 0 in order to get a

What interest rate would make it worthwhile to incur a compensating balance of $

12, 000

in order to get a

0.65 -

percent lower interest rate on a

2 -

year, pure discount loan of $

195, 000 ?

Is it worth incurring the compensating balance to obtain the lower rate?

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