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stranahan stranahan
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7 years ago
Robertson Lumber has a $250,000 compensating balance loan with its bank. The terms of the loan call for Robertson to keep 10% of the loan as a compensating balance and pay interest at an annual rate of 6.50% on the entire amount. If the firm borrows the maximum amount for one year, what is the EAR on this loan?
A) 7.22%
B) 7.39%
C) 6.87%
D) 6.50%
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
Author:
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crackerspoppycrackerspoppy
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7 years ago
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stranahan Author
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#2
7 years ago
Thank you for  the help. I had a few questions on a few of them and this really confirmed my answers.
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