Sarah purchased 700 shares of Detroit Motors stock at a price of $45 a share. The initial margin requirement is 70% and the maintenance margin is 30%. The effective interest rate on the margin loan is 6.5%. How much margin interest will she pay if she repays the loan in five months?
A) $187.29
B) $204.12
C) $217.29
D) $230.42
E) $251.25
Correct Answer:
Verified
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