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In order to finance a shipment of badminton sets,Rujisawa Import-Export is seeking a $500,000 one-year bank loan.The Marine Bank requires that Rujisawa maintain a 20% compensating balance and requires four quarterly payments.The Prairie Bank requires only a 10% compensating balance,but requires 12 monthly payments.In addition,the Prairie Bank discounts the loan.Both banks state that their interest rate is 9%.
A)Which bank has the lowest annual interest rate? (NOTE: deduct the compensating balances from the principal in determining the annual rate.)
B)If Prairie Bank eliminated its compensating-balance requirement,would your answer change?
Negative Attitudes
A negative attitude refers to a general disposition of displeasure or aversion towards something, often manifesting in pessimism or opposition.
Technology Company
A business entity that focuses on the development and manufacturing of technology products or providing technology as a service.
Cultural Assimilator
A tool or program designed to help individuals learn and adapt to the cultural norms of a different culture.
Understanding Traditions
The act of grasping the beliefs, behaviors, and values passed down within a culture or community.
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