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You have approached your bank about a one year loan for your ski and bike rental business. The business needs $16,000 and the bank has
You have approached your bank about a one year loan for your ski and bike rental business. The business needs $16,000 and the bank has offered to make the loan with the following conditions: (1) the bank will charge 4% discount interest and (2) the bank requires a 10% compensating balance. How much do you have to actually borrow from the bank to have $16,000 of usable funds?
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