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GFOA CPFO Exam - Topic 6 Question 10 Discussion

If the $20,000 is loaned at a stated interest rate of 10%with the requirement that an 18% minimum compensating balance be kept, the APR (annual percentage rate) is:
C) 12.2%
A) 12.07%
B) 12.00%
D) 13%

GFOA CPFO Exam - Topic 6 Question 10 Discussion

Actual exam question for GFOA's CPFO exam
Question #: 10
Topic #: 6
[All CPFO Questions]

If the $20,000 is loaned at a stated interest rate of 10%with the requirement that an 18% minimum compensating balance be kept, the APR (annual percentage rate) is:

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Suggested Answer: C

by Ahmed at May 05, 2022, 03:27 PM

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Sharan
9 months ago
I thought it would be higher than that, honestly.
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Hillary
9 months ago
Totally agree, 12.07% seems right!
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Felix
9 months ago
Wait, how does the compensating balance change the APR?
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Mica
10 months ago
I think it's closer to 12.07%.
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Micah
10 months ago
The compensating balance really affects the APR calculation.
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Dahlia
10 months ago
I feel like the answer might be around 12%, but I can't recall the exact formula we used for these calculations.
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Louvenia
10 months ago
I think we did a similar question where we had to adjust the interest rate based on the amount available after the compensating balance.
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Lacresha
10 months ago
I remember we calculated APR in class, but I'm not sure how the compensating balance affects it.
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Lura
10 months ago
I think the compensating balance reduces the effective loan amount, which increases the APR. I might lean towards option A or B.
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Laurene
10 months ago
This seems pretty straightforward. The global search and recent records options seem like the most logical choices here, given the permissions that have been granted. I'll make sure to select those two answers.
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Meghann
10 months ago
Ah, this is a classic Java collections problem. I think Option C is the way to go - it uses the stream() method to filter the longlist and add the matching words to the shortlist.
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Alesia
10 months ago
This is a tricky one, but I think I've got a strategy. I'll start by eliminating the options I'm most confident are features, then focus on the remaining ones to determine which is the odd one out. Gotta be careful, but I think I can figure this out.
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Irving
10 months ago
I can't recall the exact term, but I feel like hardening limit was mentioned in relation to fatigue... is that right?
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