Answered: Assume that a bank has lent a firm a P…

Assume that a bank has lent a firm a P 200,000 for 60 days at 10% interest. The loan is discounted, and the bank requires a 20% compensating balance. What is the effective annual rate?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 22PROB

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Assume that a bank has lent a firm a P 200,000 for 60 days at 10% interest. The loan is discounted, and the bank requires a 20% compensating balance.

What is the effective annual rate?

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