Question

Suncoast Boats Inc. estimates that because of seasonal nature of its business, it will borrow additional...

Suncoast Boats Inc. estimates that because of seasonal nature of its business, it will borrow additional $2,000,000 for 2 months. Suncoast will borrow @ 15% annum using a discount loan with a $8,000 processing fee.

  1. Find loan amount
  2. Find interest.
  3. Find other cost/fees.
  4. Find compensating balance.
  5. Find m and period rate.
  6. Find Annual Percentage Rate, APR
  7. Find effective annual rate, EAR.
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