Question
a.the loans will have the same effective annual rates. b. the effective rate will be lower than the nominal rate for both loans. c. the
a.the loans will have the same effective annual rates.
b. the effective rate will be lower than the nominal rate for both loans.
c. the effective rate will have a compounding frequency equal to the frequency of the nominal rate.
d. the loan with more frequent compounding will have a lower effective rate.
e.the loan which charges interest more frequently must have the higher effective rate.
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Principles Of Corporate Finance
Authors: Lawrence J. Gitman, Sean M. Hennessey
2nd Canadian Edition
0321452933, 978-0321452931
