Your Company Plans To Borrow 5 Million For 12 Months And Your Banker Gives You A
Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 14 percent interest.Calculate the effective rate of interest for the following types of loans. (a) Simple 14 percent interest with a 10 percent compensating balance. (Round your answer to 2 decimal places. Omit the “%” sign in your response.)(b) Discounted interest. (Round your answer to 2 decimal places. Omit the “%” sign in your response.)(c) An installment loan (12 payments). (Round your answer to 2 decimal places. Omit the “%” sign in your response.)(d) Discounted interest with a 5 percent compensating balance. (Round your answer to 2 decimal places. Omit the “%” sign in your response.)
Your company plans to borrow $5 million for 12 months, and your banker gives you astated rate of 14 percent interest.Calculate the effective rate of interest for the following types of loans.(a)…
