Hayleys theatrial supply in the process of negotiating a line of credit with two local banks. the prime rate is currently 8 percent. the terms follow:
Bank loan terms
1st national 1 percent above prime rate on a discount basis and a 20 percent compensating balance on the face value of the loan.
2nd national 2 percent above prime rate ad a 15 percet comansating balance.
A. calculate the effective interest rate of both banks.
B Recommend which banks line of credit Hayleys Theatrical Supply should accept.