You need to borrow $5000 to buy a used car. The local bank will lend you the money with 10 1/2% interest compounded monthly. You plan to pay the loan of in one lump payment after two years.

(a) Find the periodic interest rate.

(b) How much will you have to pay back after the two years is up?

(c) How much interest are you paying (in dollars)?

(d) Your mother offers to loan you the money for 12% simple interest. If you pay her back in the same amount of time, which is the better deal?