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You visit your local bank and inquire about the rates on two-year personal loans. Below are details for three loans: Loan 1: 3.7% per annum

You visit your local bank and inquire about the rates on two-year personal loans. Below are details for three loans:

Loan 1: 3.7% per annum repaid annually. The EAR of this loan is 3.70%3.72%3.73% .

Loan 2: 3.68% per annum repaid semi-annually. The EAR of this loan is 3.73%3.72%3.71% .

Loan 3: 3.62% per annum repaid daily. The EAR of this loan is 3.69%3.70%3.71% .

You should choose Loan 3Loan 1Loan 2 because it has the lowesthighest EAR.

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