Youve borrowed $5,179.28 and agreed to pay back the loan with monthly payments of $220. Assume the interest rate is 9% stated as an APR.

a. How long will it take you to pay back the loan? (Do not round intermediate calculations. Round your answer to the nearest whole number.) NUMBER OF MONTHS?

b. What is the effective annual rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

You invest $2,000 at a 12% annual interest rate, stated as an APR. Interest is compounded monthly. How much will you have in 1.5 years? In 2 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

First National Bank pays 6.8% interest compounded semiannually. Second National Bank pays 6% interest compounded monthly.

a. Calculate the effective annual rate for each bank. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. Which bank offers the higher effective annual interest rate?

multiple choice

• First National Bank

• Second National Bank