Question

HINT: 6% X $1,000,000 – {20% X ($1,000,000 – (6% X $1,000,000))} =
6% X $1,000,000 – {20% X ($1,000,000 - $60,000))}=
6% X $1,000,000 - {20% X $940,000}=
6% X $1,000,000 - $188,000 =
$60,000 - $ 188,000=
-$128,000
A) The interst due on a 10% loan of $1,000,000 at year end without a compensating balance is ($1,000,000 X 10%)= $100,000

B) $1,000,000 – 20% = $800,000-Compensating Balance
$1,000,000 X 9% =$90,000- intrest paid at 9%
$90,000 / $800,000 = 11.25%

Answer 1

What is your question?

Answer 2

I dont' know if i did problem C) correct and Need some direction in figuring out the annual interest rate. I have submitted my work so far. Can you give me guidance if I an on the right track or in left field