Challenge question
I.Michael is shopping for a special automobile. He finds theexact car he​ wants, a 1966 dark blue Pontiac GTO. This car iscurrently the property of a​ neighbor, so to buy it for the​agreed-upon price of 45,000​, Michael must secure his ownfinancing. He visits four different financial institutions and getsthe following available​ loans:
Bank​ 1: 3636 monthly payments of $1,399.78
Bank​ 2: 6060 monthly payments of $891.05
Bank​ 3: 312312 weekly payments of $177.97 ​(Assume a​ 52-weekyear.)
Bank​ 4: 1616 quarterly payments of $3,297.87
Which loan should Michael​ take?  ​Hint:  Which loan has thelowest​ EAR?
If Michael selects Bank 1 for the​ loan, what is the periodicinterest rate on the​ loan?
. 6250​%
If Michael selects Bank 1 for the​ loan, what is the EAR on the​loan?
  ​(Round to two decimal​ places.)
