Homework Answers
a. Loan requires 25% compensting balance
1. Borrowed amount = $150000*75% = $112500
2.Actual Interest Rate = 9000/112500*100 = 8%
b.Interest taken at the begining
1.Borrowed amount = %150000-$9000 = $141000
2.Interest Rate = $9000/$141000*100 = 6.3829%
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