The effective annual interest rate on this lending

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You've worked out a line of credit arrangement that allows you to borrow up to $60 million at any time. The interest rate is .591 percent per month.

In addition, 3 percent of the amount that you borrow must be deposited in a noninterest-bearing account. Assume that your bank uses compound interest on its line-of-credit loans.

What is the effective annual interest rate on this lending arrangement?

Reference no: EM132049967

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