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samualson samualson
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Posts: 2459
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6 years ago
Crawley, Inc. has a line of credit with HNC Bank that allows the company to borrow up to $800,000 at an interest rate of 12 percent. However, Crawley, Inc. must keep a compensating balance of 18 percent of any amount borrowed on deposit at the bank. Crawley, Inc. does not normally keep a cash balance account with HNC Bank. What is the effective annual cost of credit?
A) 12.40%
B) 12.83%
C) 14.63%
D) 15.47%
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wrote...
#1
6 years ago
 C
 
samualson Author
wrote...
#2
6 years ago
Tremendous help, I just double-checked it with my friend Smiling Face with Open Mouth
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