Question

crwで JA Avy bal.nu , what iS Tut ett uta mta

Answer 1

A	B	C	D	E	F	G	H	I	J	K	L	M
2
3		A compensating balance is the balance that must be kept with bank in order to take loan from the bank.
4		Thus the available balance of the loan is calculated by deducting the compensatory balance from the total loan amount.
5
6		Total Loan Amount	$475,000
7		Period	180	days
8		APR	7.50%
9
10		Nominal interest	=Loan Amount*APR*Period (in days)/360
11			$17,812.50	=D6*D8*D7/360
12
13		Compensating Balance %	15%
14		Compensating Balance	$71,250	=D6*D13
15
16		Available Balance	=Total loan amount - Compensatory Balance
17			$403,750	=D6-D14
18
19		Thus the interest is $17,812.50 on net cash borrowed of $403,750 for 180 days.
20
21		Effective rate	=(Nominal interest / Available Balance)*(360 / Period in Days)
22			8.82%	=(D11/D17)*(360/D7)
23
24		Hence Effective rate is	8.82%
25