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Plan A: annual interest rate is 5%, and interest is compounded semi-annually Plan B: annual interest rate is 4.8%, and interest is compounded monthly You

Plan A: annual interest rate is 5%, and interest is compounded semi-annually

Plan B: annual interest rate is 4.8%, and interest is compounded monthly

You are considering of borrowing $100,000 loan for 2 years. The bank gives you 2 plans,

namely Plan A and Plan B, and the information is given in the above table. Calculate the

effective annual rate for each loan, and decide which plan (Plan A or Plan B) should be applied.

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