3. Josephine is purchasing a used car. Her bank has offered a loan of $5000 at 5%/a compounded monthly. The used-car dealer has offered a loan of 5.5%/a compounded semi-annually. a) What is the amount owing on each loan after 1 year? b) Which loan should Josephine take and why?

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3. Josephine is purchasing a used car. Her bank has offered a loan of $5000 at
5%/a compounded monthly. The used-car dealer has offered a loan of 5.5%/a
compounded semi-annually.
a) What is the amount owing on each loan after 1 year?
b) Which loan should Josephine take and why?
Transcribed Image Text:3. Josephine is purchasing a used car. Her bank has offered a loan of $5000 at 5%/a compounded monthly. The used-car dealer has offered a loan of 5.5%/a compounded semi-annually. a) What is the amount owing on each loan after 1 year? b) Which loan should Josephine take and why?
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