What effective annual interest rate are you being, Financial Management

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What effective annual interest rate are you being

Suppose that you're planning a vacation and borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent, with interest prepaid (a discount interest loan). Also, assume that the bank requires you to maintain a compensating balance equal to 10 percent of the initial loan value. What effective annual interest rate are you being charged?

A. 14.00%

B. 24.00%

C. 28.00%

D. 18.42%

E. 16.28%

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