Question
Bank of New Hampshire offers to lend you $100,000 at a nominal rate of 5.0% (5.0% is the APR), simple interest, with interest paid quarterly.
Bank of New Hampshire offers to lend you $100,000 at a nominal rate of 5.0% (5.0% is the APR), simple interest, with interest paid quarterly. Bank of America offers to lend you the $100,000, but it will charge 5.5%, simple interest, with interest paid at the end of the year. What's the difference in the effective annual rates charged by the two banks?
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Multinational financial management
Authors: Alan c. Shapiro
10th edition
9781118801161, 1118572386, 1118801164, 978-1118572382
