The effective rate of interest for the types of loans

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Reference no: EM131011104

Your company plans to borrow $13 million for 12 months, and your banker gives you a stated rate of 24% interest. You would like to know the effective rate of interest for the following types of loans. (Each of the following parts stands alone). A. Simple 24% interest with a 10% percent compensating balance. B. Discounted Interest C. An installment loan (12 payments) D. Discounted interest with a 5% compensating balance.

Reference no: EM131011104

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