The Somerset Bank offered Blakemore Inc.the following loan alternatives in response to its request for a $75,000,1-year loan. Alternative 1: $\quad 7$ percent discount interest, with a 10 percent compensating balance.
Alternative 2: $\quad 8$ percent simple interest, with interest paid monthly. What is the effective annual rate on the cheaper loan?

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The Answer of The Somerset Bank offered Blakemore Inc.the following loan alternatives in response to its request for a $75,000,1-year loan. Alternative 1: $\quad 7$ percent discount interest, with a 10 percent compensating balance.
Alternative 2: $\quad 8$ percent simple interest, with interest paid monthly. What is the effective annual rate on the cheaper loan?

The Somerset Bank Offered Blakemore Inc 7\quad 77 Percent Discount Interest, with a 10 Percent Compensating Balance

The Somerset Bank Offered Blakemore Inc $\quad 7$ Percent Discount Interest, with a 10 Percent Compensating Balance