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

$99$

percent compounded

weeklyweekly

or from a bank at an APR of

$1010$

percent compounded

quarterlyquarterly.

Which alternative is more$$ attractive?

Question content area bottom

Part $1$

a$.$ If you borrow

$$$$100100$

from a finance company at an APR of

$99$

percent compounded

weeklyweekly

for

$11$

$$year$,$ how much do you need to payoff the$$ loan?

$$$enter your response here$$

$($Round to the nearest$$ cent.$)$

What is the effective annual rate$($EAR$)?$

enter your response here$\%$

$($Round to two decimal$$ places.$)$

b$.$ If you borrow

$$$$100100$

from a bank at an APR of

$1010$

percent compounded

quarterlyquarterly

for

$11$

$$year$,$ how much do you need to payoff the$$ loan?

$$$enter your response here$$

$($Round to the nearest$$ cent.$)$

What is the effective annual rate$($EAR$)?$

enter your response here$\%$

$($Round to two decimal$$ places.$)$

c$.$ 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 $10\%$ compounded quarterlyThe$$loan$$from$$the$$bank$$at$$an$$APR$$of$10\%$compounded$$quarterly$.$

B$.$

The loan from the finance company at an APR of $9\%$ compounded weeklyThe$$loan$$from$$the$$finance$$company$$at$$an$$APR$$of$9\%$compounded$$weekly$.$