### What is EAR implied in each option

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##### Reference no: EM13724266

Suppose you plan to borrow \$10000 from the bank and have two options to pay back:

a) \$500 monthly payment for 24 months and the first payment due one month from you take the loan.

b) \$6050 yearly payment for 2 years and the first payment due one year from you take the loan.

What is EAR implied in each option? Which one do you prefer and explain why?

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