Calculate the amount of money available to use if a firm has a $1,000,000 line of credit at a 7.22 percent rate of interest that requires a 13.6 percent compensating balance, and the firm borrowed $561,000 for 1 year. Round the answer to two decimal places.
a) Calculate the total amount of line of credit: $1,000,000 / (1 - 0.136) = $1,153,846.15
b) Calculate the amount of compensating balance: $1,153,846.15 * 0.136 = $156,923.08
c) Calculate the amount of money available to use: $1,153,846.15 - $156,923.08 = $996,923.08
d) Round the answer to two decimal places: $996,923.08