Your company plans to borrow $7 million for 12 months, and your banker gives you a stated rate of 20 percent interest.

Calculate the effective rate of interest for the following types of loans.

a.	Simple 20 percent interest with a 14 percent compensating balance. (Use 365 days a year. Round the final answer to 2 decimal places.)

Effective rate

%

b.	Discounted interest. (Use 365 days a year. Round the final answer to 2 decimal places.)

Effective rate

%

c.	An installment loan (12 payments). (Round the final answer to 2 decimal places.)

Effective rate

%

d.	Discounted interest with a 1 percent administration fee. (Round the final answer to 2 decimal places.)

Effective rate

%