Zenith Bank charges an interest rate of 16.9% per annum on a loan to Samson Ltd. The bank requires borrowers to keep compensating balance (b) on loans of 3% and there is 7% reserve requirement (RR). The bank also charges administration fees of 2.9% of the loan amount per annum. What is the contractually promised rate of return to the bank from the loan? (Instructions: Please round your answer to four decimal places. Please also keep your answer in decimals not percentage terms. e.g. if the answer is 8.157%, enter 0.0816) An
Zenith Bank charges an interest rate of 16.9% per annum on a loan to Samson Ltd. The bank requires borrowers to keep compensating balance (b) on loans of 3% and there is 7% reserve requirement (RR). The bank also charges administration fees of 2.9% of the loan amount per annum. What is the contractually promised rate of return to the bank from the loan? (Instructions: Please round your answer to four decimal places. Please also keep your answer in decimals not percentage terms. e.g. if the answer is 8.157%, enter 0.0816) An
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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Question
Zenith Bank charges an interest rate of 16.9% per annum on a loan to Samson Ltd. The bank requires borrowers to keep compensating balance (b) on loans of 3% and there is 7% reserve requirement (RR). The bank also charges administration fees of 2.9% of the loan amount per annum. What is the contractually promised
![Zenith Bank charges an interest rate of 16.9% per annum on a loan to Samson Ltd. The bank requires
borrowers to keep compensating balance (b) on loans of 3% and there is 7% reserve requirement (RR). The
bank also charges administration fees of 2.9% of the loan amount per annum. What is the contractually
promised rate of return to the bank from the loan?
(Instructions: Please round your answer to four decimal places. Please also keep your answer in decimals not
percentage terms. e.g. if the answer is 8.157%, enter 0.0816)
Answer:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8a0d8057-362f-45ed-96df-89b6d7a70949%2Fabf9c8ed-840a-4548-9c6d-d26c9cfe6d1f%2Fjbxshq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Zenith Bank charges an interest rate of 16.9% per annum on a loan to Samson Ltd. The bank requires
borrowers to keep compensating balance (b) on loans of 3% and there is 7% reserve requirement (RR). The
bank also charges administration fees of 2.9% of the loan amount per annum. What is the contractually
promised rate of return to the bank from the loan?
(Instructions: Please round your answer to four decimal places. Please also keep your answer in decimals not
percentage terms. e.g. if the answer is 8.157%, enter 0.0816)
Answer:
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