What must the rate be less than to be worth it to incur a compensating balance of $20,000 in order to get a 2-percent-lower interest rate on a 1-year, pure discount loan of $200,000?
A) The rate must be less than 78%.
B) The rate must be greater than 78%.
C) The rate must be greater than -78%.
D) The rate must be less than -78%.

Question

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The Answer of What must the rate be less than to be worth it to incur a compensating balance of $20,000 in order to get a 2-percent-lower interest rate on a 1-year, pure discount loan of $200,000?
A) The rate must be less than 78%.
B) The rate must be greater than 78%.
C) The rate must be greater than -78%.
D) The rate must be less than -78%.

What Must the Rate Be Less Than to Be Worth