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You are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a rate

You are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a rate of 13.2 percent compounded monthly. Loan B offers a rate of 13.5 percent compounded semi-annually. Loan _____ is the better offer because______.

A; the annual percentage rate is 13.2 percent and you will pay less interest.

B; the effective interest rate is 13.96% and you will pay less interest.

A; the interest is compounded more frequently.

A; the effective interest rate is 14.03% and you will pay less interest

B; the interest is compounded less frequently.

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