Sharon is looking to obtain a car loan and is reading the fine print on the various loans at the different banks. She wants to know which bank is offering the lowest effective interest rate. Below are the posted rates (or nominal interest rates). (Keep to 2 decimal places)

• The Scotia Banks posted interest rate is 5.60% (with the fine print reading compounding semi-annually, 2 times a year)
• CIBCs posted interest rate is 5.55% (with the fine print reading compounding weekly at 52 weeks).
• The Bank of Montreals posted interest rate is 5.50% (with the fine print reading compounding daily at 365 days).
• The Royal Bank of Canadas posted interest rate is 5.58% (with the fine print reading compounding monthly at 12 months).

Points: 1

1. All four effective rates are equivalent.
2. Scotia Banks effective rate is lowest.
3. CIBCs effective rate is lowest.
4. Bank of Montreals effective rate is lowest.
5. Royal Bank of Canadas effective rate is lowest.