Which of the following one-year $1000 bank loans offers the lowest effective annual rate? a. A loan
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Which of the following one-year $1000 bank loans offers the lowest effective annual rate?
a. A loan with an APR of 6.1%, compounded monthly.
b. A loan with an APR of 6.1%, compounded annually, that also has a compensating balance requirement of 10.1% (on which no interest is paid).
c. A loan with an APR of 6.1%, compounded annually, that has a 1.5% loan origination fee.
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