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Varys and Baelish are roommates. They decide to purchase a TV today and to split the cost evenly. If they wait until the entire sum is due in 5 years, then they will each have to pay $5,000. Varys makes monthly payments starting today. Baelish makes semi-annual payments starting in 2 quarters. Both face an interest rate of 8% compounded at the frequency of their payments. Of the two payment strategies, what is the lower EAR?

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Financial Management, Finance

Category:- Financial Management
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