After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at an APR of 7 percent compounded weekly or from a bank at an APR of 8 percent compounded annually. Which alternative is more attractive?

1. If you borrow $100 from a finance company at an APR of 7 percent compounded weekly for 1 year, how much do you need to payoff the loan? (round to nearest cent)

2. If you borrow $100 from a bank at an APR of 8 percent compounded annually for 1 year, how much do you need to payoff the loan? (round to the nearest cent)

3. Based on the findings in parts a and b, which alternative is more attractive? (Select the best choice below.)

a. The loan from the bank at an APR of 8% compounded annually.

b. The loan from the finance company at an APR of 7% compounded weekly.