A company has a $10,000 line of credit with a bank. The line of credit calls for an interest rate of 10 percent and a compensating balance of 5 percent. This firm needs $5,000 to pay for the inventory. a) How much does the firm need to borrow from the bank? b) What is the effective interest rate if the firm uses this line of credit with the compensating balance?
Solved
Show answers
More tips
- A Animals and plants How to Store Carrots: Tips for Homeowners...
- L Legal consultation Juvenile Justice: Who Needs It?...
- F Family and Home How to Choose the Best Diapers for Your Baby?...
- F Family and Home Parquet or laminate, which is better?...
- L Leisure and Entertainment How to Properly Wind Fishing Line onto a Reel?...
- L Leisure and Entertainment How to Make a Paper Boat in Simple Steps...
- T Travel and tourism Maldives Adventures: What is the Best Season to Visit the Luxurious Beaches?...
- H Health and Medicine Kinesiology: What is it and How Does it Work?...
- O Other How to Choose the Best Answer to Your Question on The Grand Question ?...
- L Leisure and Entertainment History of International Women s Day: When Did the Celebration of March 8th Begin?...
Answers on questions: Business
- B Business Your sister is starting 9th grade next year and is thinking about going to college. what step would you recommend she take first? a.fill out her fafsa form b.start...
- B Business Brad recently relocated from his company s main offices in detroit to be a regional manager in minneapolis. although the new job is a step up for him professionally,...
- B Business 1 point Omar is about to start his final semester of college, and he doesn t have enough money saved to afford the $750 he needs in books. He s 21, so he s going...
- B Business Think of any solutions that can eliminate wage differences in our economy today - how relevant are they I will give brainliest...
- E Engineering If the operating control on a commercial water heater fails, the gas valve will be de-energized by?...
- M Mathematics Ramesh says that based on the pattern 7 Superscript negative 5 = negative 16,807. Which statement explains whether Ramesh is correct? Ramesh is correct because 7...
- M Mathematics Solve the inequality....
- P Physics a supertanker traveling at 7.2 m/s decelerates to a halt in 12 min. Calculate the magnitud of its average decelaration in meters per second squared...
- M Mathematics Write a word phrase for the expression: 13p + 12 12 more than the product of 13 and a number p The sum of p and 12 12 more than the quotient of 13 and a number p...
- M Mathematics Show that Lim lx-2l/x-2 does not exist...
Ответ:
Answer and Explanation:
The computation is shown below:
1. Borrowed amount needed from the bank is shown below:
= Needed to pay amount ÷ 1 - compensating balance percentage
= $5,000 ÷ 0.95
= $5,263.18
b. The effective interest rate with the compensating balance is shown below is
= $5,263.18 × 10% ÷ $5,000 × 100
= $526 ÷ $5,000 × 100
= 10.53%
We simply do the above calculations for both parts so that the accurate amount and correct rate could come
Ответ:
a master's degree
Explanation: