i will 10 upvotes urgent Suppose your firm is seeking an eight-year, amortizing $750,000 loan with annual payments and your bank is offering you the choice between a $795,000 loan with a $45,000 compensating balance and a $750,000 loan without a compensating balance. The interest rate on the $750,000 loan is 8.5 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose it?(Do not round intermediate calculations and round your final answer to 2 decimal places.)   Interest rate%

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.