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The Dean Company has an outstanding 1 year bank loan of P800000 at a stated interest rate of 8 In addition Dean is required to maintain a 20 compensating balance in its checking account Assuming

The Dean Company has an outstanding 1 year bank loan of P800,000 at a stated interest rate of 8%. In addition, Dean is required to maintain a 20% compensating balance in its checking account. Assuming Dean would normally maintain a zero balance in its checking account , the effective interest rate on the loan is

A. 8.0%       C. 11.11%
B. 10.0%     D. 6.4% 

Jun 20 2021 View more View Less

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