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Questo 45 Correct 1 points out of 1 Flag question Brooke is Treasurer of Henderson Birdie Machines Inc Brooke would like to know what is the effect rate of interest if she can borrow $10,000 for 60 days at a cost of $200 interest Select one A 9
Questo 45 Correct 1 points out of 1 Flag question Brooke is Treasurer of Henderson Birdie Machines Inc Brooke would like to know what is the effect rate of interest if she can borrow $10,000 for 60 days at a cost of $200 interest Select one A 9.9096 B. 10 50% C11.50% D. 12.00% The correct answer is: 12.00% Questo 46 Correct 1 points out of 1 Flag question Kim Seiyoung is the CFO of Kim's Golf Instruction Inc. Kim would like to take out a loan for expansion and is told that the rate of interest is 10 percent, but a compensating balance of 15 percent is required. What is the effective rate of interest i Kim would like to botrow $300,000 from her bank for one year? Select one A 10,13% 8. 11.76% C. 13.33% D. 14.12%
Expert Solution
| Question 45: | |
| Effective rate = (200/10000)*(360/60) = | 12.00% |
| Answer: [D] 12.00% | |
| Question 46: | |
| Amount to be borrowed to get $300,000 net of compensating balance = 300000/85% | $ 352,941 |
| Interest payable = 352941*10% = | $ 35,294 |
| Effective rate = 35294/300000 = | 11.76% |
| Answer: [B] 11.76% |
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