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qwelly [4]
3 years ago
7

Farmers bank offers to lend you $50,000 at a nominal rate of 5.0%, simple interest, with interest paid quarterly. merchants bank

offers to lend you the $50,000, but it will charge 6.8%, simple interest, with interest paid at the end of the year. what's the difference in the effective annual rates charged by the two banks?
Business
1 answer:
vivado [14]3 years ago
4 0

Hello there!

Your answer would be <u>1.71%</u>

Here is the work:

To find the annual paid interest for Farmer's Bank, since in the question it is the quarterly interest rate:

(1+(0.05/4))^4 -1 = 1.0125^4 -1 = 0.0509 = 5.09%

Merchant's bank would be the same rate since it's already calculated as annually: 6.8%

Subtract those:

6.8-5.09 = 1.71%

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Answer:

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Explanation:

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Second, note we are told the Ratio of number of beads to stickers Tania had left was 1:3;

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Since we know Sally received 16 beads from Tania we find the Ratio by multiplying 3/1x 16 = 48 stickers was left with Tania.

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Answer:

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<em />

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