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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. What 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

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91728876

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