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Estimating the cost of bank? credit

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(Estimating the cost of bank? credit) Paymaster Enterprises has arranged to finance its seasonal? working-capital needs with a? short-term bank loan. The loan will carry a rate of 14 percent per annum with interest paid in advance? (discounted). In? addition, Paymaster must maintain a minimum demand deposit with the bank of 11 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow ?$110,000 for a period of 5 ?months, what is the annualized cost of the bank? loan?

Reference no: EM133060303

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