Your company plans to borrow $7 million for 12 months, and your banker gives you a stated rate of 20 percent interest. Calculate the effective rate of interest for the following types of loans.
a. Simple 20 percent interest with a compensating balance of 14 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.)
b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places.)
c. An installment loan (12 payments). (Input your answer as a percent rounded to 2 decimal places.)
d. Discounted interest with a compensating balance of 7 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.)