Come and go bank offers your firm a discount interest loan, Ask an Expert

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Come and Go Bank offers your firm a discount interest loan at 7 percent for up to $32 million, and in addition requires you to maintain a 5 percent compensating balance against the amount borrowed.

What is the effective annual interest rate on this lending arrangement? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Effective annual interest rate %

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Financial Management, Finance

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