Luther Industries Is Offered a $1 Million Dollar Loan for Four

question 30

Essay

Luther Industries is offered a $1 million dollar loan for four months at an APR of 9%.Luther's bank requires that the firm maintain a compensating balance equal to 5% of the loan amount in a non-interest bearing account and the bank charges a 1% origination fee.Calculate the the effective annual rate EAR for this loan.

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The quality of being easily distinguishable from others due to unique characteristics or features.

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