MNO,Inc.paid a total interest of $3,000 on its line of credit borrowings for the year.MNO's average annual borrowings are $30,000.The bank retains $6,000 as a compensating balance.What is the MNO's annual effective rate of interest?
A) 8.33%
B) 10.00%
C) 12.50%
D) 30.00%
Correct Answer:
Verified
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