Penn inc needs to borrow 250000 for the next 6 months the, Ask an Expert

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Penn Inc. needs to borrow $250,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with an 8% interest rate subject to a 20% of loan compensating balance. Currently, Penn Inc. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. What will be the annual percentage rate, or APR, for this financing?

A. 8.75%

B. 11.25%

C. 12.5%

D. 10.00%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92404752

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