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Bank One offers to lend you $50,000 at a nominal rate of 7.1%, compounded monthly. Bank Two also offers to lend you the $50,000, but it will charge a nominal rate of 7.37%, compounded annually. What is the difference in the Effective rate of two banks and which Bank would you go to for the Loan. (Use two decimal points for difference, X.XX%) 0.03%, Choose Bank 1 0.03%, Choose Bank 2 0.04%, Choose Bank 1 0.04%, Choose Bank 2 0.0%, Same effective rate, choose Bank 1 or 2

Bank One offers to lend you $50,000 at a nominal rate of 7.1%, compounded monthly. Bank Two also offers to lend you the $50,000, but it will charge a nominal rate of 7.37%, compounded annually. What is the difference in the Effective rate of two banks and which Bank would you go to for the Loan. (Use two decimal points for difference, X.XX%) 0.03%, Choose Bank 1 0.03%, Choose Bank 2 0.04%, Choose Bank 1 0.04%, Choose Bank 2 0.0%, Same effective rate, choose Bank 1 or 2

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Bank One offers to lend you $50,000 at a nominal rate of 7.1%, compounded monthly. Bank Two also offers to lend you the $50,000, but it will charge a nominal rate of 7.37%, compounded annually. What is the difference in the Effective rate of two banks and which Bank would you go to for the Loan. (Use two decimal points for difference, X.XX%) 0.03%, Choose Bank 1 0.03%, Choose Bank 2 0.04%, Choose Bank 1 0.04%, Choose Bank 2 0.0%, Same effective rate, choose Bank 1 or 2
Transcribed Image Text:Bank One offers to lend you $50,000 at a nominal rate of 7.1%, compounded monthly. Bank Two also offers to lend you the $50,000, but it will charge a nominal rate of 7.37%, compounded annually. What is the difference in the Effective rate of two banks and which Bank would you go to for the Loan. (Use two decimal points for difference, X.XX%) 0.03%, Choose Bank 1 0.03%, Choose Bank 2 0.04%, Choose Bank 1 0.04%, Choose Bank 2 0.0%, Same effective rate, choose Bank 1 or 2
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