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What is the effective rate of interest for the loan

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Reference no: EM132958211

Problem 1: Kim's Autobody Shop would like to take out a $300,000 loan for expansion. Its bank is offering a 10 percent loan with a 25 percent compensating balance. What is the effective rate of interest for this loan?

Select one:

A. 14.12%

B. 10.11%

C. 13.33%

D. 11.76%

Reference no: EM132958211

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