Principal of both loans would be payable at maturity

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Reference no: EM131919811

Fort Collins Corp. needs to borrow $200,000 for one year. CSU Bank has offered to lend the funds at an 8% annual rate subject to a 20% compensating balance. Fort Collins currently maintains $20,000 on deposit in CSU Bank. UNC Finance Co. has offered to lend the funds at an 8% annual rate with discount-loan term. The principal of both loans would be payable at maturity as a single sum. Based on this information, Fort Collins Corp. should use the UNC Finance Co. loan.

Reference no: EM131919811

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