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What is the contractually promised rate of return on loan

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Question - Disney Bank has a loan lent to firm Tom & Jerry. The interest rate charged for this loan is 13.9% per annum. The bank also charges various fees which amount to 4.5% of the loan amount per annum. The compensating balance (b) is 4%, and there is 10% reserve requirement (RR). What is the contractually promised rate of return on this loan?

Reference no: EM133025014

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