You are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a rate of 7.45% compounded daily. Loan B offers a rate of 7.5% compounded semi-annually. Loan _____ is the better offer because ______.
A) A; you will pay less interest
B) A; the annual percentage rate is 7.45%
C) B; the annual percentage rate is 7.64%
D) B; the interest is compounded less frequently
E) B; the effective annual rate is 7.64%
Correct Answer:
Verified
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