A small business is looking for a bank loan to buy needed equipment to start a new project. There are three different bank to choose between. Bank A charges 10% compounded daily, Bank B charges 10.25% compunded weekly, and bank C charges 10.5% compounded monthly. (Hint: 1 year could be 366 or 52 weeks)
a) Find the effective annual interest rate charged by each of the three banks.
b) Find the effective quarterly interest rate charged by each of the three banks.
c)Which bank should be chosen?
d) How much should the interest rate be for bank A in order to break-even with bank B?