Musk Corporation needs $225,000 to pay its bills. Musk's bank offers a one-year 12 percent simple interest loan that requires a 25 percent compensating balance to be maintained with the bank. Musk currently holds no funds at the lending bank. How much must Musk borrow to ensure that it has $225,000 to pay its bills?
A. $281,250
B. $300,000
C. $225,000
D. $900,000
E. $168,750
Answer: B
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