First National Bank charges an APR (or stated annual interest rate) of 10.1 percent compounded monthly on its business loans. First United Bank charges an APR of 10.4 percent compounded semiannually (twice per year) on its loans.

Required:

(a)	Calculate the Effective Annual Rate (EAR) of First National Bank and First United Bank? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

EAR

First National Bank	%
First United Bank	%

(b)	As a potential borrower, to which bank would you go for a new loan?

(Click to select) First United Bank First National Bank