southwest bank offers to lend you 50,000 at a nominal rate of 7.2% compounded monthly. the loan principal plus interest must be repaid at the end of the year. Wooburn bank also offers to lend you the 50,000 but it will charge an anula rate of 8.7% with no interest due until the end of the year. how much higer or lower if the effective annual rate charged?

a. 1.86% b. 1.56% c.0.96% d. 0.66% e. 1.26%