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Your company has agreed to a $360 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.43 percent per quarter

Your company has agreed to a $360 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.43 percent per quarter on any funds borrowed and maintain a 4 percent compensating balance on any funds borrowed at zero percent interest. What is the effective annual interest rate on this line of credit?

  • 5.01%

  • 6.09%

  • 5.84%

  • 5.97%

  • 5.19%

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