Del Hawley, owner of Hawley’s Hardware, is negotiating with First City Bank for a 1-year loan of $50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate?
Interest figured as 8% of the $50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year
