Question: Comprehensive. You need a $ 1 0 , 0 0 0 car loan and are talking to two different banks. ( LO 6 ) a

Comprehensive. You need a $10,000 car loan and are talking to two different banks. ( LO6)
a. Big Bank offers you a $10,000 auto loan requiring 48 monthly payments of $275, paid at the end of each month. What is the
APR of the loan? What is the effective annual rate?
b. Little Bank's loan has 4 annual year-end instalments, each equal to 12 times the Big Bank monthly loan payments. Should you
accept Little Bank's loan?
c. What annual payment would make the Little Bank loan equivalent to the Big Bank loan? Why is it not simply 12 times the Big
Bank monthly payment?
Comprehensive. You need a $10,000 car loan and are talking to

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