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You want to buy a new computer, but you are $1000 short of the amount you need. Your aunt has agreed to lend you the
You want to buy a new computer, but you are $1000 short of the amount you need. Your aunt has agreed to lend you the $1000 you need now, provided you pay her $1200 two years from now. She compounds interest monthly. Another place from which you can borrow $1000 is the bank. There is, however, a loan processing fee of $20, which will be included in the loan amount. The bank is expecting to receive $1220 two years from now based on monthly compounding of interest. (a) What monthly rate is your aunt charging you for the loan? What is the bank charging? (c) Would you prefer to borrow from your aunt or from the bank
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