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Question: A company plans to borrow $2 million for a year. The stated interest rate is 12 percent. Compute the effective interest rate under each of these assumptions. Each part stands alone.

a. The interest is discounted.

b. There is a 20 percent compensating balance requirement.

c. It is a 12-month installment loan.

d. Assume the interest is only $45,000 and the loan is for 90 days.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92596400

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