Suppose you buy a house for $640,000 and you have $90,000 in savings which you use as a down payment. The rest you finance with a 5-year mortgage with monthly payments and a quoted interest rate of 3.2% APR. In Canada, mortgage rates are quoted with semi-annual compounding, so this rate is an APR with semi-annual compounding and monthly payments.

a) Suppose your bank offers you a 3.2% APR loan for a car with monthly payments. How does the effective annual rate of this loan compare with that of the mortgage?