Luther Industries is offered a $1 million loan for four months at an APR of 9%.Luther's bank requires that the firm maintain a compensating balance equal to 5% of the loan amount in a non-interest-bearing account and the bank charges a 1% origination fee.Calculate the effective annual rate (EAR)for this loan.

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The Answer of Luther Industries is offered a $1 million loan for four months at an APR of 9%.Luther's bank requires that the firm maintain a compensating balance equal to 5% of the loan amount in a non-interest-bearing account and the bank charges a 1% origination fee.Calculate the effective annual rate (EAR)for this loan.

Luther Industries Is Offered a $1 Million Loan for Four