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Farmers Bank offers to lend you $30,000 at a nominal rate of 6.0%, simple interest, with...

Farmers Bank offers to lend you $30,000 at a nominal rate of 6.0%, simple interest, with interest paid quarterly. Gold Coast offers to lend you the $30,000, but it will charge 7.0%, simple interest, with interest paid semiannually. What's the difference in the effective annual rates charged by the two banks?   

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Answer #1

What's the difference in the effective annual rates charged by the two banks?
=(1+6%/4)^4-(1+7%/2)^2
=-0.9861%

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