This topic contains a solution. Click here to go to the answer

Author Question: Crenshaw Inc. has a $400,000 line of credit with a local bank. The bank requires a compensating ... (Read 273 times)

gbarreiro

  • Hero Member
  • *****
  • Posts: 566
Crenshaw Inc. has a $400,000 line of credit with a local bank. The bank requires a compensating balance of 10% of the loan and extends credit to Crenshaw at 1% over the current prime rate. Crenshaw needs the use of $200,000 for the three-month period. They currently have no deposits with the lending bank.

a.What will the effective annual cost of this credit be? (Assume a 360-day year and a 9% prime
rate.)

b.Using the above information, what would be the effective interest rate if the firm discounted
the interest on the loan?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by gbarreiro on May 1, 2019

flexer1n1

  • Sr. Member
  • ****
  • Posts: 373
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 35% of students answer this correctly




gbarreiro

  • Member
  • Posts: 566
Reply 2 on: May 1, 2019
Thanks for the timely response, appreciate it


recede

  • Member
  • Posts: 315
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

The horizontal fraction bar was introduced by the Arabs.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

If you use artificial sweeteners, such as cyclamates, your eyes may be more sensitive to light. Other factors that will make your eyes more sensitive to light include use of antibiotics, oral contraceptives, hypertension medications, diuretics, and antidiabetic medications.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

For a complete list of videos, visit our video library