Suppose you want to borrow money from banks. You are considering
two loans. The terms of them are equivalent with the exception of the interest
rates. Loan A offers a rate of 7.75 percent, compounded daily. Loan B offers a
rate of 8 percent, compounded semi-annually. Which loan should you select and
why?

Question

06-06-2022
Business

Answered

Looking for trustworthy answers? Westonci.ca is the ultimate Q&A platform where experts share their knowledge on various topics. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Suppose you want to borrow money from banks. You are considering
two loans. The terms of them are equivalent with the exception of the interest
rates. Loan A offers a rate of 7.75 percent, compounded daily. Loan B offers a
rate of 8 percent, compounded semi-annually. Which loan should you select and
why?

Sagot :

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.

For the quadratic equation [tex]\(2x^2 + kx - 2 = 0\)[/tex], one root is 2.a) Determine the value of [tex]\(k\)[/tex].b) What is the other root?

Solve for [tex]\( x \)[/tex].[tex]\[ \log_5(x + 2) = 1 - \log_5(x + 6) \][/tex]If there is more than one solution, separate them with commas. If there is no sol

Write a paragraph response to the following question:If you could be an animal, what would you be?

The relation [tex]\( Q \)[/tex] is described as a list of ordered pairs, shown below.[tex]\[ Q = \{(-2, 4), (0, 2), (-1, 3), (4, -2)\} \][/tex]Domain: [tex]\(\s

The test to detect the presence of a liver disorder is 98% accurate for a person who has the disease and 97% accurate for a person who does not have the disease

A hot air balloon descends to the ground. The function [tex]\(a(t)=210-15t\)[/tex] describes the altitude of the balloon.- What does [tex]\(t\)[/tex] represent?

Integrate the following expression:[tex]\[ \int ax \sec^2(ax) \, dx \][/tex]

If you have the following data about puzzle pieces in a box, about how many puzzle pieces are estimated to be in the box? Mass of Puzzle Pieces + Box = 839 gram

Which of the following were elements of Rome's constitution designed to prevent the emergence of another monarchy?a. generosity of the elitesb. compassion towar

What is the direction of the magnetic field at point P?

ewomazinoade ewomazinoade · Answer 1 · 2022-06-09T13:10:43-04:00

The loan I would select is loan A. This is because it has a lower effective annual rate.

Which loan would I select?

The loan I would select would be the cheaper one. In order to determine the cheaper loan, I would calculate the effective annual rate. The effective annual rate is the actual interest rate that is paid on a loan.

Effective annual rate = (1 + APR / m ) ^m - 1

Where: M = number of compounding

Loan A = ( 1 + 0.0775/365)^365 - 1 = 8.06%

Loan B = (1 + 0.08/2)^2 - 1 = 8.16%

To learn more about the effective annual rate, please check: https://brainly.com/question/4064975

#SPJ1

Sagot :

Which loan would I select?

Other Questions