Youve worked out a line of credit arrangement that allows you to borrow up to...
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| Youve worked out a line of credit arrangement that allows you to borrow up to $45 million at any time. The interest rate is .53 percent per month. In addition, 4 percent of the amount that you borrow must be deposited in a non-interest-bearing account. Assume that your bank uses compound interest on its line of credit loans. |
| a. | What is the effective annual interest rate on this lending arrangement? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | Suppose you need $23 million today and you repay it in 6 months. How much interest will you pay? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
I got A as 6.83 which seems to be correct
but I am struggling with B
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