General Rent-All's officers arrange a $50,000 loan.The company is required to maintain a minimum account balance of 10% of the outstanding loan in their chequing account.This is referred to as:

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The requirement to maintain a minimum account balance is known as a compensating balance. This is a common condition of certain types of loans, as it helps to reduce the lender's risk by ensuring that the borrower maintains a certain level of liquidity. An instalment loan is a loan that is repaid in equal instalments over time, a discounted loan is a loan that involves the lender buying the current and future value of a loan from the borrower at a discount, and a balloon payment is a large payment that is due at the end of a loan term. None of these terms accurately describe the situation described in the question.

General Rent-All's Officers Arrange a $50,000 Loan