Posted by **patricia** on Sunday, February 12, 2012 at 6:07pm.

HINT: 6% X $1,000,000 – {20% X ($1,000,000 – (6% X $1,000,000))} =

6% X $1,000,000 – {20% X ($1,000,000 - $60,000))}=

6% X $1,000,000 - {20% X $940,000}=

6% X $1,000,000 - $188,000 =

$60,000 - $ 188,000=

-$128,000

A) The interst due on a 10% loan of $1,000,000 at year end without a compensating balance is ($1,000,000 X 10%)= $100,000

B) $1,000,000 – 20% = $800,000-Compensating Balance

$1,000,000 X 9% =$90,000- intrest paid at 9%

$90,000 / $800,000 = 11.25%

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