ou've worked out a line of credit arrangement that allows you to borrow up to $45 million at any time

a) Computation of Effective Annual Interest Rate on this lending arrangement:

Given,

Borrowed amount (A) = $45 million

Amount deposited in a noninterest-bearing account = 4% of $45 million = $1.80 million

Amount Used = $45 million - $1.80 million = $43.20 million

But interest will be charged on borrowed amount

So,

Interest = A * (1+r) ^t - A

Here,

Monthly interest rate (r) = 0.41%

Time period (t) = 1 months

Interest = $45 million * (1+ 0.41%) ^1 - $45 million

= $45.1845 million - $45 million

Interest = $0.1845 million

But actual used amount is only $43.20 million

Therefore,

Effective Monthly Interest Rate on this lending arrangement = ($0.1845 million /$43.20 million) *100 = 0.4271% per month
Effective Annual Interest Rate on this lending arrangement = (1+Effective Monthly Rate) ^12 -1

= (1 + 0.4271%) ^12 -1

= 1.05247 -1 = 0.05247 or 5.25%

b) Computation of Interest:

Assume that you have to borrow amount x from bank

Therefore,

x *(1-4%) = $11 million

Or 

x = $11 million / (1-4%) = $11.4583 million

So that you can use $11 million (96%) and $0.4583 million (4%) deposited in a noninterest-bearing account. But you have to pay interest on total amount of  $11.4583 million

Therefore,

 Interest in six months I = A * (1+r) ^t - A

Here,

Borrowed amount A =  $11.4583 million

Interest amount I =?

Monthly interest rate r = 0.41%

Time period t = 6 months

Interest =  $11.4583 million * (1+ 0.41%) ^6 -  $11.4583 million

= $11.7431 million -$11.4583 million

Interest = $0.2847806 million or $284,780.06