Would It Be Worth It to Incur a Compensating Balance

question 137

Multiple Choice

Would it be worth it to incur a compensating balance of $4,000 in order to get a 1.5-percent-lower interest rate on a 1-year, pure discount loan of $300,000?

• A) Yes, if the interest rate is less than 13.64 percent
• B) No, if the interest rate is less than 13.64 percent
• C) Yes, if the interest rate is more than 1.5 percent
• D) Not enough information is given to determine

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Definitions:

Social Interaction

is the process by which individuals act and react to those around them, forming the foundation of social relationships and society at large.

Exploration

The act of traveling through an unfamiliar area to learn about it or the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.

Self-discovery

A process by which an individual gains insights into their own character, feelings, or motivations, often leading to a deeper understanding of oneself.

Leadership Effectiveness

The extent to which a leader successfully achieves desired outcomes through the direction, facilitation, and guidance of others.