company usually has an average balance in its bank account equal to $60,000. The The company makes a loan for $80,000 to pay it off over the long term. The interest rate on the loan is 7%. The bank requires the company that, while the loan is in force, the company must have an average balance in your bank account of not less than $80,000. The requirement of thi
company usually has an average balance in its bank account equal to $60,000. The The company makes a loan for $80,000 to pay it off over the long term. The interest rate on the loan is 7%. The bank requires the company that, while the loan is in force, the company must have an average balance in your bank account of not less than $80,000. The requirement of thi
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1.
A company usually has an average balance in its bank account equal to $60,000. The
The company makes a loan for $80,000 to pay it off over the long term. The interest rate on the loan is
7%. The bank requires the company that, while the loan is in force, the company must have
an average balance in your bank account of not less than $80,000. The requirement of this balance
compensation will result in the effective interest rate that the company will pay will be:
a. 7%
b. Less than 7%
c. Greater than 7%
d. cannot be determined
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