If Analog Computers can borrow at 8% annually for three years, what is the effective rate of interest on a $1,000,000 loan where a 15% compensating balance is required?
A) 11.18%
B) 17.27%
C) 9.41%
D) 24%

Name: If Analog Computers can borrow at 8% annually for three years, what is the effective rate of interest on a $1,000,000 loan where a 15% compensating balance is required? A) 11.18% B) 17.27% C) 9.41% D) 24%
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Question

Quizplus · Accepted Answer

Interest rate/(1 − c) = 8%/(1 − 0.15) = 9.41%

If Analog Computers Can Borrow at 8% Annually for Three