Uptown Bank Has Granted a Line of Credit of $80,000

question 81

Multiple Choice

Uptown Bank has granted a line of credit of $80,000 with an interest rate of 7.5 percent and a compensating balance requirement of 2.5 percent to Jones Hardware.The compensating balance requirement is based on the total amount borrowed.What is the effective annual interest rate if the firm needs $55,000 for one year to finance its inventory?

• A)8.80 percent
• B)9.44 percent
• C)8.12 percent
• D)7.69 percent
• E)7.78 percent

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A stimulus or event that follows a behavior and increases the likelihood of that behavior being repeated.

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modifications or adjustments in actions or reactions of an organism due to various factors like learning or adaptation.

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