Question

With a quoted interest rate of 5% and a 10% compensating balance, what is the effective rate of interest (use a $200,000 loan proceeds amount)? Round your final answer into 2 decimal places. For example, if your answer is 0.01%, put 0.01 in the system.

Answer 1

effective rate of interest= 5.56%

Step-by-step explanation:

Please see attachment .