T2 KCT 6 (Tutorial)

Dad says ... 

Lets move on to home loans. While we

don’t have to pick one yet, I’m trying to understand the different terms.

Mum says...Can you tell us which one of these loans is the most expensive? (Hint: calculate the EAR, to display 4 decimal places, for each loan to allow comparison)

ME

Bank:    7.15% p.a., interest paid

weekly.

YOU

Bank:  7.17% p.a., interest paid

fortnightly.

WE

Bank:    7.18% p.a., interest paid monthly.