How much does map have to borrow

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Reference no: EM132002785

Question: Montana Allied Products (MAP) must borrow $1.7 million to finance its working capital requirements.The bank has offered a 45-day simple interest loan with a quoted interest rate of 8 percent. Calculate the loan's APR and [Math Processing Error] assuming there is

(a) no compensating balance requirement and

(b) a 15 percent compensating balance requirement, which MAP must satisfy from the loan proceeds.

(c) How much does MAP have to borrow so that it has $5.1 million to pay its bills if the loan requires a 15 percent compensating balance?

Reference no: EM132002785

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