A group of young entrepreneurs are looking for a financing loan for their startup company. They...
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A group of young entrepreneurs are looking for a financing loan for their startup company. They are comparing between three different financing companies to choose from. Company A charges 10% compounded daily, company B charges 10,25% compounded weekly, and company C charges 10.5% compounded monthly. (Hint: 1 year could be 366 or 52 weeks) a) Find the effective annual interest rate charged by each of the three financing companies b) Find the effective quarterly interest rate charged by each of the three companies (8 Marks) (8 Marks) (3 Marks) c) Which financing company should be chosen? d) How much should the interest rate be for company A in order to break-even with company B (6 Marks) A group of young entrepreneurs are looking for a financing loan for their startup company. They are comparing between three different financing companies to choose from. Company A charges 10% compounded daily, company B charges 10,25% compounded weekly, and company C charges 10.5% compounded monthly. (Hint: 1 year could be 366 or 52 weeks) a) Find the effective annual interest rate charged by each of the three financing companies b) Find the effective quarterly interest rate charged by each of the three companies (8 Marks) (8 Marks) (3 Marks) c) Which financing company should be chosen? d) How much should the interest rate be for company A in order to break-even with company B (6 Marks)
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