Your friends are going to Puerto Vallarta, Mexico, over Reading Week and you want to go too. Unfortunately, you haven't been good at saving, so you need to borrow

$$1800$ to pay for the trip. You can finance the trip on your credit card at a rate of $21\%$ APR with daily compounding. Alternatively, your parents $($who are both bankers$)$

are willing to lend you the money at a rate of $11\%$ per six months compounded every six months.

a$.$ What is the EAR of borrowing with your credit card? $($Assume $365$ days in a year.$)$

b$.$ What is the EAR of borrowing from your parents?

c$.$ If you plan to repay the $$1800$ in equal monthly instalments, what would be the rates to use in the following annuity formulas to calculate your monthly payments.

i$.$ Assume you borrowed with the credit card.

ii$.$ Assume you borrowed from your parents.

annuity of $C$ for $n$ periods with interest rate $r$ or growing perpetuity