Solved:
Answered by AI, Verified by Human Experts
Craig is considering four loans. loan l has a nominal rate of 8.254%, compounded daily. loan m has a nominal rate of 8.474%, compounded weekly. loan n has a nominal rate of 8.533%, compounded monthly. loan o has a nominal rate of 8.604%, compounded yearly. which of these loans will offer craig the best effective interest rate? a. loan l b. loan m c. loan n d. loan o please select the best answer from the choices provided a b c d
Craig is considering four loans. loan l has a nominal rate of 8.254%, compounded daily. loan m has a nominal rate of 8.474%, compounded weekly. loan n has a nominal rate of 8.533%, compounded monthly. loan o has a nominal rate of 8.604%, compounded yearly. which of these loans will offer craig the best effective interest rate? a. loan l b. loan m c. loan n d. loan o please select the best answer from the choices provided a b c d
The effectiveinterest rateof the loan would beIn this case, we are given 4 options:Loan L has a nominal rate of 8.254% compounded dailyLoan M has a nominal rate of 8.474% compounded weeklyLoan N has a nominal rate of 8.533% compounded monthlyLoan O has a nominal rate of 8.604% compounded yearlyTheformulaofcompounded interest rateis:Where:A = amount, P = principal amount, r = interest rate, n = number of times interest rate compounded, t = timeLet’s assume the principal amount is $100 for 1 yearLoan L =A = $108.603Loan M =A = $108.834Loan N =A = $108.875Loan O =A = $108.604Therefore, the best effective interest rate for Craig is Loan L with nominal rate of 8.254% compounded daily.To learn more aboutinterest rate, click here:brainly.com/question/29117355#SPJ4...