Essay
A company is looking at various financing agreements. Bank A has agreed to loan the company $100,000 at an interest rate of 6%. This is the lowest interest rate the company has been offered. However, as a condition to the loan, the company must maintain a compensating balance amount equal to 10% of the loan. Determine the company's actual effective interest rate on the loan.
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Compensating balance = 100,000...View Answer
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