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(Calculating an EAR) You have a choice of borrowing money from a finance company at 24 percent compounded annually or borrowing money from a bank at 26 percent compounded daily. Which alternative is the mostattractive?

If you can borrow funds from a finance company at 24 percent compounded annually, the EAR for the loan is ___________ %. ?(Round to two decimal places.)

If you can borrow funds from a bank at 26 percent compounded daily, the EAR for the loan is ____________ %. ?(Round to two decimal places.)

Based on the findings above, which alternative is more attractive? ?(Select the best choice below.)

A. The loan from the finance company at 24 % compounded annually

B. The loan from the bank at 26 % compounded daily.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92418276

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