ABC Bank offers to lend you $50,000 for one year at a quoted annual rate of 8.33% with each payment at the end of each month.  DEF Bank also offers to lend you the same amount at a quoted annual rate of 8.65%, with each payment at the end of each quarter.  What is the difference in the effective annual rates charged by the two banks?

Answer rating: 100% (QA)

To calculate the effective annual rates charged by the two banks we need to consider the compounding ... View the full answer