A firm has a $100,000 line of credit with a 6% compensating balance requirement. The quoted rate on the line is prime + 4%, and the prime rate is...

A firm has a $100,000 line of credit with a 6% compensating balance requirement. The quoted rate on the line is prime + 4%, and the prime rate is currently 3%. The firm requires $50,000 for an investment project. What is the loan amount they have to borrow? What is the effective annual rate?