Problem 1: EAR and compounding a) Calculate the APR, for the provided compounded frequencies, of an investment opportunity that has an EAR of 8% Complete the green spaces in the table: Compounding Periods per Year EAR APR Frequency Annually 1 8% Semi-Annually 2 8% Quarterly 4 8% Monthly 12 8% Daily 365 8% b) A financial advisor recommends you to take the investment opportunity with the highest APR. Do you agree with this advice? Explain your answer. Problem 2: Loan APR and EAR BCT is a recently open tea store facing difficulties to meet its short term obligations. The owner decides to contact Money King, a short term lender, for a $2,000 loan to be paid in 1 month. Money King demands a fee of $500 to be paid. This is, in 1 month BCT must pay $2,500 to Money King. a) Express the loan fee as an interest rate b) Calculate the APR and the EAR of the loan