alculate the difference in the effective annual rates of interest offered by both banks if the company borrows the funds from Bucks Bank over three months and Wealth Bank over eight months. Round off all calculations to two (2) decimal places
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Philander Limited requires a bank loan of R225 000 in order to finance it’s operations and is considering options from two banks, namely Bucks and Wealth Bank. Wealth Bank has offered to charge an interest rate of 10,50% provided the loan is taken out for eight months but their commission percentage (%) is 0,50% higher than that is charged by Bucks Bank on any advances made. REQUIRED: |
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Calculate the difference in the effective annual rates of interest offered by both banks if the company borrows the funds from Bucks Bank over three months and Wealth Bank over eight months. |
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