Athlexic has a line of credit with Fidelity National Bank that allows Athlexic to borrow up to $350,000 at an interest rate of 5%.However, Athlexic must keep a compensating balance of 10% of any amount borrowed on deposit at Fidelity.Athlexic does not normally keep a cash balance account with Fidelity.What is the effective annual cost of credit (round to nearest .01 percent)?

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The Answer of Athlexic has a line of credit with Fidelity National Bank that allows Athlexic to borrow up to $350,000 at an interest rate of 5%.However, Athlexic must keep a compensating balance of 10% of any amount borrowed on deposit at Fidelity.Athlexic does not normally keep a cash balance account with Fidelity.What is the effective annual cost of credit (round to nearest .01 percent)?

Athlexic Has a Line of Credit with Fidelity National Bank