Kerry Corporation is planning to get a 270-day $500,000 simple interest loan from its bank at a quoted interest rate of 12 percent. If the bank has a 20% compensating balance requirement and Kerry currently holds no funds at the lending bank, what is the effective annual rate (eEAR) of the loan? (Assume there are 360 days in a year. Round your answer to two decimal places.)?

A. ?11.52%
B. ?13.78%
C. ?14.25%
D. ?15.27%
E. ?12.55%


Answer: D

Business

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