Mmaintain a compensating balance

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Reference no: EM132712218

Y Trading Co. was granted a $200,000 bank loan with 12% stated interest.

Required: The effective annual rate, under the following cases:

a. Y Trading Co. receives the entire amount of $200,000.

b. Y Trading Co. was granted a discounted loan.

c. Y Trading Co. is required to maintain a compensating balance of $10,000 under the non-discounted loan.

d. Y Trading Co. is required to maintain a compensating balance of 10% under a discounted loan.

Reference no: EM132712218

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