1) You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 13% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 7% every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places)

A) The effective annual rate for your credit card is __ % (Round to two decimal places)

B) The effective annual rate for the loan from your parents is __ % (Round to two decimal places)

2) You have found three investment choices for a one-year deposit: 10.6% APR compounded monthly, 10.6% APR compounded annually, and 9.8% APR compounded daily. Compute the EAR for each investment choice. (Assume that there are 365 days in the year.) (Note: Be careful not to round any intermediate steps less than six decimal places)

The EAR for the 1st investment choice is: __ % (Round to two decimal places).

The EAR for the 2nd investment choice is: __ % (Round to two decimal places).

The EAR for the 3rd investment choice is: __ % (Round to two decimal places).