Jason Industries has a line of credit at Bank Lucas that requires it to pay 11% interest on its borrowing and to maintain a compensating balance equal to 15% of the amount borrowed. The firm has...

Jason Industries has a line of credit at Bank Lucas that requires it to pay 11% interest on its borrowing and to maintain a compensating balance equal to 15% of the amount borrowed. The firm has borrowed $800,000 during the year under the agreement. Show Solutions and Explanation. Calculate the effective annual rate on the firm’s borrowing in each of the following circumstances: A.The firm normally maintains no deposit balances at Bank Lucas (Format: 11.11%) B.The firm normally maintains $70,000 in deposit balances at Bank Lucas. (Format: 11.11%) C.The firm normally maintains $150,000 in deposit balances at Bank Lucas. (Format: 11%)