Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the
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Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the bank offers 12 percent interest that compounds annually.
Your credit application has been viewed by a few banks and two of them replied; Bank ALFA offers you a loan at 12 percent annual rate-interest payment by the end of year, and Bank BETA offers a loan with the same annual interest rate, but interest payment is 3 percent by the end of each quarter. Which loan do you prefer? Why?
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Both loans have the same annual interest rate of 12 but the payment schedules are different Bank Alf...View the full answer
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Related Book For 
Foundations Of Finance
ISBN: 9781292155135
9th Global Edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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