Bill just financed a used car through his credit union. His loan requires payments of $275 a month for five years. Assuming that
1 answer:
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Answer:
EAR for First national Bank = 13.92 %
EAR for First United Bank = 13.85 %
Explanation:
given data
First National Bank charges = 13.1 percent
compounded monthly , 1 year = 12 month
First United Bank charges = 13.4 percent
compounded semiannually , 1 year = 2 semiannually
solution
we get here first EAR for First national Bank that is express as
EAR for First national Bank = .....................1
here r is rate and n is month
so put here value
EAR for First national Bank =
EAR for First national Bank = 13.92 %
and
EAR for First United Bank is
EAR for First United Bank = ..................2
here r is rate and n is semi annually
EAR for First United Bank =
EAR for First United Bank = 13.85 %
here First United bank EAR is less