A bank is offering 4% interest on loans and 3% on savings. If you are getting...

Question

Question

A bank is offering 4% interest on loans and 3% on savings. If you are getting a loan, which compounding do you prefer?

Answer 1

Answer #1

Ans C. Annually

Since we have taken the loan and have to pay the interest, we would prefer to pay the lowest interest.

When the interest is compounded annually, the interest rate is lowest as compared to compounding continuously, monthly or semianually.

Answer 2

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