Your company has agreed to a $340 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.41 percent per quarter on any funds borrowed and maintain a 6 percent compensating balance on any funds borrowed at zero percent interest. What is the effective annual interest rate on this line of credit? Multiple Choice O O O O O 6.13% 5.12% 5.76% 4.94% 5.94%
Your company has agreed to a $340 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.41 percent per quarter on any funds borrowed and maintain a 6 percent compensating balance on any funds borrowed at zero percent interest. What is the effective annual interest rate on this line of credit? Multiple Choice O O O O O 6.13% 5.12% 5.76% 4.94% 5.94%
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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Transcribed Image Text:Your company has agreed to a $340 million fixed-commitment line of credit. The loan agreement calls for your company to pay 1.41 percent per quarter on any funds borrowed and maintain a 6 percent compensating
balance on any funds borrowed at zero percent interest. What is the effective annual interest rate on this line of credit?
Multiple Choice
O
O
O
O
6.13%
5.12%
5.76%
4.94%
5.94%
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