Cost bank loan Delta Company wishes to borrow Rs 100,000 for 1 year. It must choose one of the following alternatives. a. 9 percent loan on a collect basis, with face value due at end. b. 8.4 percent loan on a discount basis, with face value due at the end. C. 6 percent loan on an add on basis, with equal quarterly payments required on the initial face value. Which alternative has the lowest effective yield, using annual compounding for the first two and quarterly compounding for the last?
