Question
First Bank offers personal loans of 7.60% compounded monthly. Second Bank offers similar loans at 7.75% compounded semiannually. Which one of the following statements is
First Bank offers personal loans of 7.60% compounded monthly. Second Bank offers similar loans at 7.75% compounded semiannually. Which one of the following statements is correct concerning these loans?
The First Bank loan has an effective rate of 7.67%
The Second Bank loan has an effective rate of 8.03%
The annual percentage rate for the Second Bank loans is 7.90%
Borrowers should prefer the loans offered by the Second Bank
The First Bank offers the better deal on loans
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
4th Edition
0256147175, 978-0256147179
