Answered: Daisy's LLC borrowed $2.40 million at…

Daisy's LLC borrowed $2.40 million at an APR of 9.0 percent. The loan called for a compensating balance of 18 percent. What is the effective interest rate on the loan?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

Daisy's LLC borrowed $2.40 million at an APR of 9.0 percent. The loan called for a compensating balance of 18 percent. What is the effective interest rate on the loan? (Round answer to 1 decimal place, e.g. 12.5%.)

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