Effective annual rate of interest on the line of credit, Accounting Basics

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Effective annual rate of interest on the line of credit

Jackson Industries has borrowed $125,000 under a line-of-credit agreement. While the company normally maintains a checking account balance of $15,000 in the lending bank, this credit line requires a 20% compensating balance. The stated interest rate on the borrowed funds is 10%. What is the effective annual rate of interest on the line of credit?

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Accounting Basics: Effective annual rate of interest on the line of credit

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Accounting Basics: Effective annual rate of interest on the line of credit

Reference No:- TGS068793

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Effective annual rate of interest on the line of credit

Reference No:- TGS068793

Recent Questions Asked Accounting Basics

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