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(20pts) You approach two different banks for a loan of $200,000 to finance the purchase of this equipment. Farm Credit charges 12% APR compounded monthly.

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(20pts) You approach two different banks for a loan of $200,000 to finance the purchase of this equipment. Farm Credit charges 12% APR compounded monthly. CoBank charges 12.4% APR compounded semiannually. Which bank should you use for the loan? With CoBank, how much would it cost to pay off the loan with one payment in 2 years? If inflation is 4% annually, what is the real return CoBank is earning on this loan? Explain the relationship between inflation, rates of return, and purchasing power

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