1. Ranger Cleaning Company has borrowed $90,000 at a stated APR of 8.5 percent. The loan calls for a compensating balance of 8 percent.
What is the effective interest rate on this loan? (Round answer to 2 decimal places, e.g. 15.21.)
Effective interest rate %
2. Techno Corp. management is considering developing new computer software. The cost of development will be $675,000, and management expects the net cash flow from sale of the software to be $195,000 for each of the next six years. If the discount rate is 14 percent, what is the net present value of this project?