Cray Computing needs a 6-month loan for $300,000. Its bank quotes a simple interest rate of 11% on theloan. a.) What is the annual percentage rate (APR) if there is a compensating balance requirement of 30%of the loan amount? b.) What is the effective annual rate (EAR) if there is a compensating balancerequirement of 30% of the loan amount?

Loan amount=$300000Compensating balance=30%Simple interest rate=11%

Answered: Cray Computing needs a 6-month loan for…

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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