What is the effective rate of interest

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1. Maxim Air Filters Inc. plans to borrow $221,000 for one year. Northeast National Bank will lend the money at 11 percent interest and requires a compensating balance of 30 percent.

2. What is the effective rate of interest? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

3. A project has a first cost of $10,000, net annual benefits of $2,000, and a salvage value of $3,000 at the end of its 10-year useful life. The project will be replaced identically at the end of 10 years, and again at the end of 20 years. What is the present worth of the entire 30 years of service, given an interest rate of 10%?

Reference no: EM131896676

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