Question
(Calculating an EAR) You have a choice of borrowing money from a finance company at 24 percent compounded daily or borrowing money from a bank
(Calculating an EAR) You have a choice of borrowing money from a finance company at 24 percent compounded daily or borrowing money from a bank at 26 percent compounded annually. Which alternative is the mostattractive?
If you can borrow funds from a finance company at 24 percent compounded daily ,the EAR for the loan is _____%
.(Round to two decimal places.
)If you can borrow funds from a bank at 26 percent compounded annually, the EAR for the loan is _________%.(Round to two decimal places.)
Based on the findings above, which alternative is more attractive?
A.The loan from the bank at 26 % compounded annually
B.The loan from the finance company at 24 % compounded daily
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Governmental And Nonprofit Accounting Theory And Practice
Authors: Robert J Freeman, Craig D Shoulders, Gregory S Allison, Terry K Patton, Robert Smith,
9th Edition
0132552728, 9780132552721
