Question: Challenge question I . Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This

Challenge question I. Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of aneighbor, so to buy it for the agreed-upon price of $40,000, Michael must secure his own financing. He visits four different financial institutions and gets the following available loans:

Bank 1:48 monthly payments of $948.60

Bank 2:72 monthly payments of $677.17

Bank 3:156 weekly payments of $280.33 (Assume a 52-week year.)

Bank 4:20 quarterly payments of $2,344.21

Which loan should Michael take?Hint:Which loan has the lowest EAR?

What is the periodic interest rate for each loan from each bank?

If Michael selects Bank 1 for the loan, what is the periodic interest rate on the loan?

If Michael selects Bank 2 for the loan, what is the periodic interest rate on the loan?

If Michael selects Bank 3 for the loan, what is the periodic interest rate on the loan?

If Michael selects Bank 4 for the loan, what is the periodic interest rate on the loan?

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