A Firm Borrows $100,000 from the Bank, but Has to Maintain

question 33

Multiple Choice

A firm borrows $100,000 from the bank, but has to maintain a compensating balance of $20,000 with the bank.The annual interest rate for the loan is 12%.What is the effective annual rate if the interest is compounded monthly?

• A)12.03%
• B)13.00%
• C)14.05%
• D)16.08% Effective Annual Rate with Compensating Balances =

---

Definitions:

Dream Analysis

A technique involving the interpretation of dreams to uncover unconscious conflicts. Dreams have a manifest content (the actual events in the dream) and a latent content (the symbolic meaning of the dream events).

Questionnaires

Questionnaires are a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents.

Scientifically Validating

The process of establishing the reliability and accuracy of findings or theories through empirical evidence and experimental procedures.

Freudian Concepts

Ideas and theories developed by Sigmund Freud, including the unconscious mind, defense mechanisms, and the psychosexual stages of development.