Question: In Problem 7 Loan A and Loan D borrow the
In Problem 7, Loan A and Loan D borrow the same amount each year. However, Loan A borrows every month, and Loan D borrows every other month (note that the borrowing for Loan D for January equals the borrowing for Loan A for January and February). If As We Go Bank charges its customers for the unused balance, which loan strategy is better if the unused balance is charged 3% (APR) per month for the bank? Which loan borrowing strategy is better for the customer?
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