Question
Question: Your Nick company needs to borrow funds and has several options available to it, Loans A, B and C. The interest rates (APR) for
Question: Your Nick company needs to borrow funds and has several options available to it, Loans A, B and C. The interest rates (APR) for these options are given below. What is the EAR of the loan option the company should choose?
Loan A: 4.26% APR, (compounded semi-annually
Loan B: 4.25% APR, (compounded quarterly)
Loan C: 4.24% APR, (Compounded daily, assume 365 days in a year)
EAR of Loan A: 4.31%
EAR of Loan B: 4.32%
EAR of Loan C: 4.33%
Which loan should be taken AND why?
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Handbook Of Financial Planning And Control
Authors: Robert P. Greenwood
3rd Edition
0566083728, 978-0566083723
