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( Calculating an EAR ) ( Related to Checkpoint 5 . 7 on page 1 7 9 ) After examining the various personal loan rates

(

Calculating an EAR

) (

Related to Checkpoint

5.7

on page

179)

After examining

the various personal loan rates available to you, you find that you can borrow funds from a finance company at

12

percent compounded monthly or from a bank at

13

percent compounded annually. Which alternative is the more attractive?

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