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An American factory needs to arrange financing for its expansion program.

Bank A offers to lend the American factory the required funds on a loan in which interest must be paid at the end of each month, and the stated nominal rate is 13.00% per year.

Bank B offers to lend the required funds on a loan in which interest is continuously compounded and the stated nominal rate is 12.95% per year.

Bank C offers to lend the required funds on a loan in which interest must be paid semi-annually, and the stated nominal rate is 13.10% per year.

Bank D offers to lend the required funds on a loan in which interest must be paid quarterly, and the stated nominal rate is 13.03% per year.

From which of the 4 banks should the American factory obtain financing?

Make sure that you show or explain all calculations. Briefly explain your choice

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91789987

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