Bank A is offering a loan of $4,000 at 8% interest rate compounded monthly while Bank B is offering $4,000 loan at 7.98% interest rate compounded daily. Which bank should you take the loan from?

Choose the correct answer:

Bank B as it has a lower effective rate of 8.51%

Bank B as it has a lower effective rte of 8.306099%

Both banks have same effective rate so it does not matter which bank you borrow from

Bank A since it has a lower effective rate of 8.299951%

Bank A as the effective rate is lower at 8.51%