Question
Citizens Bank offers to lend you $100,000 at a nominal rate of 5.0% (5.0% is the APR), simple interest, with interest paid monthly. Bank of
Citizens Bank offers to lend you $100,000 at a nominal rate of 5.0% (5.0% is the APR), simple interest, with interest paid monthly.
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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Public Finance In Canada
Authors: Harvey S. Rosen, Ted Gayer, Jean-Francois Wen, Tracy Snoddon
5th Canadian Edition
1259030776, 978-1259030772
