Problem based on compensatory balance


On January 1, 2010, Lynn Company borrows $2,000,000 from National Bank at 11% annual interest. In addition, Lynn is required to keep a compensatory balance of $200,000 on deposit at National Bank which will earn interest at 5%. The effective interest that Lynn pays on its $2,000,000 loan is??

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Problem based on compensatory balance
Reference No:- TGS096935

Expected delivery within 24 Hours