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You are planning to borrow $200,000 to buy your dream house. Bank X offers you APR 4.0% compounded monthly, and Bank Y offers you APR
You are planning to borrow $200,000 to buy your dream house. Bank X offers you APR 4.0% compounded monthly, and Bank Y offers you APR 4.1% compounded semi-annually.
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- a. Compute the EAR of Bank X.
- b. Compute EAR of Bank Y.
- c. Which bank provides you a better offer? Explain why.
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