(solution) 12. (Cost of bank loan) A bank loan agreement calls for an interest rate equal to prime rate plus 1%

(solution) 12. (Cost of bank loan) A bank loan agreement calls for an interest rate equal to prime rate plus 1%

A12. (Cost of bank loan) A bank loan agreement calls for an interest rate equal to prime rate plus 1%. A12. (Cost of bank loan) Individual assignment: Text Problem Set Corporate Financial Management (3rd Edition) Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007) A12. (Cost of bank loan) A bank loan agreement calls for an interest rate equal to prime rate plus 1%. If prime rate averages 9% and non-interest-earning compensating balances equal to 10% of the loan must be maintained, what are the APR and the APY of the loan assuming annual payments?