Effective Interest Rate: Serengeti Travels Has Borrowed $50,000 at a Stated

question 5

Multiple Choice

Effective interest rate: Serengeti Travels has borrowed $50,000 at a stated APR of 8.5 per cent. The loan calls for a compensating balance of 8 per cent. What is the effective interest rate for this company? (Please refer to section 14.7 'Short term bank loan')

• A) 9.24%
• B) 8.50%
• C) 8.00%
• D) 16.50%

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Definitions:

Dream Analysis

A therapeutic technique that interprets the content of dreams to uncover hidden desires or emotions.

Free Association

A psychoanalytic process where a patient says whatever comes to mind without censorship, used to explore the unconscious.

Empathetic Approach

A method or strategy that involves understanding and sharing the feelings of another individual.

Client-centered

A psychotherapeutic approach developed by Carl Rogers that emphasizes providing a supportive environment in which clients can improve their self-concept and increase their understanding of their own behaviors.