Jetson CoHas an $80,000 Line of Credit with a 12 Percent

question 64

Multiple Choice

Jetson Co.has an $80,000 line of credit with a 12 percent interest rate and a 10 percent compensating balance requirement that is based on the total amount borrowed.What is the effective annual interest rate if the firm needs $45,000 for one year?

• A)12.54%
• B)12.67%
• C)12.12%
• D)13.33%
• E)12.00%

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