Kenneth's Arrows and Bows borrow $8,000 for one year at 13 percent interest. What is the effective rate of interest if the loan is discounted? (Use 360 days in a year.)
Less than 14.0 percent
More than 15.1 percent, but less than 16.0 percent
More than 14.0 percent, but less than 15.1 percent
More than 16.0 percent
Holland Construction Co. has an outstanding 180-day bank loan of $394,000 at an annual interest rate of 9.4%. The company is required to maintain a 13% compensating balance in its checking account. What is the effective interest rate on the loan? Assume the company would not normally maintain this average amount. (Use 360 days in a year. Round your answer to 2 decimal places.)
12.80%
10.80%
9.80%
13.80%
Friedman Roses, Inc. needs $79,000 in funds for expansion. With a compensating balance requirement of 21%, how much will the firm need to borrow? (Round your answer to the nearest dollar amount.)
$21,000
$100,000
$79,000
$100,050