What is the difference in the effective annual rates eff


Gloria Steak needs capital for its expansion program. One bank will lend the required $1,000,000 if Gloria Steak agrees to pay interest each quarter and repay the principal at the end of the year. The quoted rate is 10%. A second lender offers 9%, daily compounding (365-day year), with interest and principal due at the end of the year. What is the difference in the effective annual rates (EFF%) charged by the two banks?

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Finance Basics: What is the difference in the effective annual rates eff
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