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What is the difference in the effective annual rates

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Question - Chase Bank offers to lend you $100,000 at a nominal rate of 5.50%, compounded daily. Bank of America offers to lend you the $100,000, but it will charge 6.20%, compounded monthly. What's the difference in the effective annual rates charged by the two banks?

a. 0.73%

b. 0.70%

c. 0.02%

d. 0.55%

e. 0.18%

Reference no: EM132827546

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