Calculating effective rate of interest, Finance Basics

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Calculating effective rate of interest

Question:

Logan Drilling Corp. plans to borrow $200,000 for one year. Northern National Bank will lend the money at 10 percent interest and requires a compensating balance of 20 percent. What is the effective rate of interest?

Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.Provide step by step solutions for the above question

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