What is the effective cost of the loan
Question:
Hagar Company's bank requires a compensating balance of 20% on a $100,000 loan. If the stated interest on the loan is 7%, what is the effective cost of the loan?
1. 5.83%2. 7.00%3. 8.40%4. 8.75%
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Hagar Company's bank requires a compensating balance of 20% on a $100,000 loan. If the stated interest on the loan is 7%, what is the effective cost of the loan
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