What Must the Rate Be Less Than to Be Worth

question 132

Multiple Choice

What must the rate be less than to be worth it to incur a compensating balance of $2,000 in order to get a 2 percent lower interest rate on a one-year, pure discount loan of $50,000?

• A) The rate must be less than 48 percent.
• B) The rate must be greater than 48 percent.
• C) The rate must be greater than −48 percent.
• D) The rate must be less than −48 percent.

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Definitions:

F3 Key

A function key used to perform specific actions in different programs, often associated with search functionality in Windows.

Stored Building Block Entry

Predefined or user-saved text, formatting, or other elements in software that can be quickly inserted into documents.

Width Of A Column

The measurement of how broad or narrow a column is in a table or spreadsheet, affecting how data is displayed or read.

Shift Key

A modifier key on a keyboard used to type capital letters and other alternate "upper" characters.