Grant Technologies Needs $300,000 to Pay Its Supplier

Grant Technologies needs $300,000 to pay its supplier. Grant's bank is offering a 210-day simple interest loan with a quoted interest rate of 11 percent and a 20 percent compensating balance requirement. Assuming there are 360 days in a year and Grant currently holds no funds at the lending bank, what is the annual percentage rate (APR) of the loan?

A) 8.02%
B) 14.14%
C) 11.00%
D) 13.75%
E) 12.55%

Correct Answer:

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