Twitter Corporation needs $225,000 to pay its bills. Their bank offers a one-year 12 percent simple interest loan that requires a 25 percent compensating balance to be maintained with the bank. Musk currently holds no funds at the lending bank. How much must Twitter borrow to ensure that it has $225,000 to pay its bills? (represent your numeric result with no decimal places)

Twitter Corporation needs $225,000 to pay its bills. Their bank offers a one-year 12 percent simple interest loan that requires a 25 percent compensating balance to be maintained with the bank. Musk currently holds no funds at the lending bank. How much must Twitter borrow to ensure that it has $225,000 to pay its bills? (represent your numeric result with no decimal places)

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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Calculating the Return On A Loan

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Twitter Corporation needs $225,000 to pay its bills. Their bank offers a one-year 12 percent simple interest loan
that requires a 25 percent compensating balance to be maintained with the bank. Musk currently holds no funds
at the lending bank. How much must Twitter borrow to ensure that it has $225,000 to pay its bills?
(represent your numeric result with no decimal places)

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