You are considering two ways of financing a spring break vacation. You could put it on your credit card, at $14\%$ APR, compounded monthly, or borrow the money from your parents, who want an interest payment of $10\%$ every six months. Which is the lower rate? $($Note: Be careful not to round any intermediate steps less than six decimal places.

QUESTIONS

The effective annual rate for your credit card is

The effective annual rate for the loan from your parents is

The option with the lower effective annual rate is Option $1$ or Option $2$

Option $1$: The loan from your parents

Option $2$: Yor credit card