You have a choice of borrowing money from a finance company at 19% compounded daily or borrowing from a bank at 21% compounded weekly.
Which alternative is the most attractive?
If you can borrow funds from a finance company at 19% compounded daily, the EAR for the loan is .....
If you borrow fund from a bank at 21% compounded weekly, the EAR of this loan is ..... Based on the finding above,
which alternative is more attractive?
A) The loan from the Bank at 21% compounded weekly
B) The loan from the finance company at 19% compounded daily.