Problemcome and go bank offers your firm a discount, Ask an Expert

Finance

Problem:

Come and Go Bank offers your firm a discount interest loan at 6 percent for up to $19 million, and in addition requires you to maintain a 3 percent compensating balance against the amount borrowed.

Required:

Question: What is the effective annual interest rate on this lending arrangement?

Note: Please show how you came up with the solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163170

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