What is the return to the bank on these loans

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Metrobank offers one-year loans with a 16 percent stated rate, charges a 1/2 percent loan origination fee, imposes a 12 percent compensating balance requirement, and must pay a 4 percent reserve requirement to the Federal Reserve. What is the return to the bank on these loans? Answer must be given as a percentage.

Reference no: EM131567986

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