East Coast Bank offers to lend you $25,000 at a nominal rate of 7.5%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year. Midwest Bank also offers to lend you the $25,000, but it will charge an annual rate of 8.3%, with no interest due until the end of the year. What is the difference in the effective annual rates charged by the two banks?
a. 0.93%
b. 0.77%
c. 0.64%
d. 0.54%
e. 0.43%