The Stant Shoe Company Established a Line of Credit with a Local

question 4

Multiple Choice

The Stant Shoe Company established a line of credit with a local bank. The maximum amount that can be borrowed under the terms of the agreement is $100,000 at an annual rate of 5%. A compensating balance of 10% of the amount borrowed is required. What is the largest amount of money Stant will actually be able to use from the line of credit?

• A) $90,909
• B) $90,000
• C) $111,111
• D) $100,000

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