After completing your 2015 income tax return, you discover that you owe income tax. You can either pay the late payment penalty at 5% compounded daily for one year or borrow the money you need to pay your taxes. Below what semiannually compounded rate will the loan cost you less in interest?

Answer rating: 100% (QA)

Compound interest or compounding interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated inte... View the full answer