Digital Access Inc. needs $275,560 in funds for a project. (Assume the loan term is one year.)
a. With a compensating balance requirement of 17 percent, how much will the firm need to borrow? (Do not round intermediate calculations.)
Amount to be borrowed =
b. Given your answer to part a and a stated interest rate of 11 percent on the total amount borrowed, what is the effective rate on the $275,560 actually being used? (Input your answer as a percent rounded to 2 decimal places.)
Effective rate of interest =