Your business needs a $30,000 loan. Your banker offers multiple loan options listed below (each independent from others). The banker states that a $3,000 interest payment (10% is extremely generous, however, you know that the terms of the loan can greatly affect the true cost of borrowing. Calculate the effective rate of interest (APR) and evaluate which loan you should take and why.

a. The loan must be paid off in 9 months.

b. Loan must be paid in one year, but the bank requires a 30% compensating balance.

c. One-year discounted interest loan.

d. Loan must be paid in semi-annual installments over one year.

e. Discounted interest loan, with an interest payment of $2,400 (8%), and a 30% compensating balance.