Abank offers your firm a revolving credit arrangement for up to $56 million at an interest rate of 1.40 percent per quarter. the bank also requires you to maintain a compensating balance of 3 percent against the unused portion of the credit line, to be deposited in a non-interest-bearing account. assume you have a short-term investment account at the bank that pays .75 percent per quarter, and assume that the bank uses compound interest on its revolving credit loans. what is your effective annual interest rate (an opportunity cost) on the revolving credit arrangement if your firm does not use it during the year?

Over the past several years, joyce chen has been able to save regularly. as a result, today she has $54,188 in savings and investments. she wants to establish her own business in 5 years and feels she will need $100,000 to do so. a. if she can earn 6% on her money, how much will her $54,188 in savings/investments be worth in 5 years? will joyce have the $100,000 she needs? if not, how much more money will she need? b. given your answer to part a, how much will joyce have to save each year over the next 5 years to accumulate the additional money? assume she can earn interest at a rate of 6%. c. if joyce can afford to save only $4,000 a year then, given your answer to part a, will she have the $100,000 she needs to start her own business in 5 years?