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DAS,IncHas a Line of Credit with FBT Bank That Allows

question 158

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DAS,Inc.has a line of credit with FBT Bank that allows DAS to borrow up to $400,000 at an annual interest rate of 11 percent.However,DAS must keep a compensating balance of 25 percent of any amount borrowed on deposit at the bank.DAS does not normally have a cash balance account with the bank.What is the effective annual cost of credit?


Definitions:

Diagnosis Code

Alphanumeric codes that healthcare providers use to classify and record diseases, symptoms, and medical conditions.

Tuberculosis

A potentially serious infectious disease that primarily affects the lungs and is caused by the bacterium Mycobacterium tuberculosis.

Positive

Affirmative in attitude or quality; indicative of the presence of a particular condition, substance, or feature.

Poliomyelitis

An infectious viral disease that affects the nervous system, potentially leading to paralysis.

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