What is the annual interest rate

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Company expects to use $1,600,000 short term credit bus wants a $3,000,00 line of credit in case of unexpected events. LIBOR is 4% and the loan is priced at LIBOR plus 2.5% with Commitment fee of 0.3% on the unused portion of the line. Bank also requires a 10% compensating balance to be held in an noninterest bearing account at the bank. What is the Annual Interest Rate and how much needs to be borrowed?

Reference no: EM13768320

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