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5 Your company has arranged a revolving credit agreement for up to $74 million...

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Accounting

5
Your company has arranged a revolving credit agreement for up to $74 million at an interest rate of 1.43 percent per quarter. The agreement also requ your company to maintain a compensating balance of 4 percent of the unused portion of the credit line, to be deposited in a noninterest-bearing acc Your company's short-term investment account at the same bank pays an interest rate of .57 per quarter. What is the effective annual interest rate if y company borrows $39 million for one year?
Multiple Choice
6.52%
5.84%
6.38%
7.45%
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