What was the effective interest rate for the loan

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Reference no: EM13777464

The Roadside Inn borrowed $100,000 for two years at an annual interest rate of 10% from a bank that required a $20,000 compensating balance. What was the effective interest rate for the loan?

A. 10%

B. 12%

C. 12.5%

D. 14%

Reference no: EM13777464

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