Compensating balance requirement

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Connecticut Advanced Technologies ( CAT) is planning to get a 30-day $150,000 simple interest loan from its bank. The quoted interest rate on the loan is 10 percent. Calculate the APR and r(EAR) assuming the loan (a) has no compensating balance requirement and (b) has a 20 percent compensating balance requirement, and CAT currently holds no funds at the lending bank.

Reference no: EM131757099

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