Use of Financial Calculator TI BA II Plus Required

question 56

Multiple Choice

Use of Financial Calculator TI BA II Plus required. Which would be the best loan offer? Loan A has a 9.5 percent rate calculated quarterly and Loan B has a 9.25 percent rate calculated monthly. Recall the use of the calculator keys to compare annual effective rates of interest.

• A)The effective rate on Loan A is 9.84 percent and on Loan B is 9.92. percent. Therefore, Loan A is best.
• B)The effective rate on Loan A is 9.84 percent and on Loan B is 9.65 percent. Therefore, Loan B is best.
• C)Loan B is compounded more frequently, so Loan A would be the better choice.
• D)Loan A is compounded less frequently, so it would be the best option.

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Definitions:

First-Generation

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