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Social Science Clinic => Business => Finance => Topic started by: newbem on May 1, 2019

Title: The effective interest rate on short-term loans from Bank A is 12.5 percent per year. Bank B claims ...
Post by: newbem on May 1, 2019
The effective interest rate on short-term loans from Bank A is 12.5 percent per year. Bank B claims that their interest rate is only 11 percent per year. However, Bank B charges interest on a discount basis. Which bank is charging the lowest effective rate of interest on a one-year loan?
Title: The effective interest rate on short-term loans from Bank A is 12.5 percent per year. Bank B claims ...
Post by: kxciann on May 1, 2019
Effective cost of loan from Bank A = .125

Effective cost of loan from Bank B = = .1236
Bank A is charging the lowest effective rate of interest.
Title: The effective interest rate on short-term loans from Bank A is 12.5 percent per year. Bank B claims ...
Post by: newbem on May 1, 2019
Excellent
Title: The effective interest rate on short-term loans from Bank A is 12.5 percent per year. Bank B claims ...
Post by: kxciann on May 1, 2019
Great! Please up vote :D