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XYZ Corporation plans to take a short-term loan of Tk. 50 crore for one year. The company approached Prime Bank Limited for the loan. The

XYZ Corporation plans to take a short-term loan of Tk. 50 crore for one year. The company approached Prime Bank Limited for the loan. The bank says it would extend the loan with the following terms and conditions:

a. The loan will be discount loan.

b. The interest rate on the loan would be:

9% per year

If the company takes the loan, how much interest would the company pay to the bank? Find out the effective annual rate of interest on the loan.

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