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Question 1 9 You want to borrow $ 2 0 0 , 0 0 0 to buy a house. Your bank offers two options. Option

Question

19

You want to borrow $

200, 000

to buy a house. Your bank offers two options.

Option

1

: an APR of

8.5 %,

compounded annually

Option

2

: an APR of

8 %,

with continuous compounding

Which option will you choose? Why?

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