Interest on the loan is compounded annually

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Reference no: EM13890503

You need to borrow $5,000 for two years. Easy Finance Co. will loan you the money and you will pay back the finance company $6,250 in two years and the interest on the loan is compounded annually. You do not want to pay more than 10% annual interest. Would you want to take out this loan? Yes/No because ____.

a. Yes; the loan interest is exactly 10%

b. Yes; the loan interest is 8.46%

c. No; the loan interest is 12.4%

d. No; the loan interest is 11.8%

Reference no: EM13890503

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