Question

Analog computers needs to borrow $475,000 from the midland bank. the bank requires a 15% compensating balance. how much money will analog need to borrow in order to end up with $475,000 spendable cash? $546,250 $758,264 $558,824 $71,250

Answer 1

Spendable cash required = $475,000

Because the bank  requires a 15% (0.15) compensating balance,
the amount to be borrowed is
475,000*(1 + 0.15) = 546,250

Answer: $546,250