Question $5$: $[5\mathrm{.}0$ Marks$]$

A startup company is considering two ways of financing the purchase of accounting software with a cost of $150,000$ SAR. The company's accountants believe that the software is not only useful to automate the process of financial reporting and help reduce errors but also it will save time and money. The firm could borrow $150,000$ SAR from either Alinma Bank with an $5\mathrm{.}75\%$ APR, compounded monthly or from the Saudi Investment Bank with an $5\mathrm{.}78\%$ APR, compounded semiannually. Answer following questions:

a$)$ Compute the effective annual rate $($EAR$)$ of the loan from each bank.

$[3\mathrm{.}0$ marks$]$

b$)$ Which bank should the company choose to borrow from based on your answer in Part A and why?

$[1\mathrm{.}0$ mark$]$

c$)$ Why would the company make its decision based on the EAR rather than the APR.