What is the annual interest rate of each loan

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Problem

Your company is considering the following three alternative bank loans for $ 1,000,000: i. 10 percent loan paid at the end of the year without compensatory balance ii. 9 percent loan paid at the end of the year with a compensator balance of 20 percent iii. 6 percent loan with a discount with a compensating balance requirement of 20 percent suppose that it would normally have any bank balance that met the 20 percent compensating balance requirement. Get the instant assignment help. What is the annual interest rate of each loan?

Reference no: EM133910421

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