EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Financial Accounting
Transcribed Image Text:Nighthawk Lighting Company borrows $300,000 for one
year at 7.00% interest. The loan is a discounted loan and
also requires a compensating balance of 5%. What is the
effective annual rate of interest on this loan?
A. 7.00%
B. 7.37%
C. 7.53%
D. 7.96%
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