Calculate the apr and r ear assuming the loan

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Reference no: EM131871286

PanAir Reservations (PAR) borrowed $150,000 for 60 days from its bank. The simple interest rate on the loan is 12 percent. Calculate the APR and r EAR assuming the loan is a simple interest loan with (a) no compensating balance requirement and (b) a 25 percent compensating balance requirement, and PAR currently holds no funds at the lending bank. (c) How much would PAR have to borrow if it needed $150,000 to pay bills and the loan required a 25 percent compensating balance?

Reference no: EM131871286

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