Question
(Calculating an EAR) You have a choice of borrowing money from a finance company at 19 percent compounded quarterly or borrowing money from a bank
(Calculating an EAR) You have a choice of borrowing money from a finance company at 19 percent compounded quarterly or borrowing money from a bank at 21 percent compounded weekly. Which alternative is the most attractive?
If you can borrow funds from a bank at 19 percent compounded quarterly, the EAR for the loan is ___% (round to two decimal places)
If you can borrow funds from a bank at 21 percent compounded weekly, the EAR for the loan is ____% (round to two decimal places)
Based on the findings above, which alternative is more attractive (Select the best choice below)
A.) The loan from the bank at 21% compounded weekly
B.) The loan from the finance company at 19% compounded quarterly
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