Find the cost of the credit

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Reference no: EM131308926

Cowley Corporation has a $100,000 line of credit that requires it to keep 10% of it as compensating balance, and also pay a 1% commitment fee. The interest on the line of credit is fixed at 12%. Cowley draws only $85,000 in cash from this line. Find the cost of the credit.

Reference no: EM131308926

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