-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 7.75 percent,compounded daily.Loan B offers a rate of 8 percent,compounded semi-annually.Which loan should you select and why?
A) A;the effective annual rate is 8.06 percent.
B) A;the annual percentage rate is 7.75 percent.
C) B;the annual percentage rate is 7.68 percent.
D) B;the effective annual rate is 8.16 percent.
E) The loans are equivalent offers so you can select either one.
Correct Answer:
Verified
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