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If your answer does not match the answers given below, checkwith the instructor. There is always the chance, albeit small, thatyour answer is correct and there is a typo below.)1. Bank A offers tolend you money at 10 percent compounded monthly, Bank B at 11percent compounded quarterly, and Bank C at 12 percent compoundedannually. Calculate the effective rates and state which bank offersthe lowest cost of borrowed capital.2. What are theinterest payments on a $200 loan if the contractual rate is 12%,the loan will be paid back in four uniform interest and principalpayments at the end of the next four years, and the remainingbalance method of calculating interest will be used (fullyamortized)? What is the actuarial, annual percentage, and theeffective interest rate? (AIR, APR, ie =12%)3. What are theinterest payments on a $1,000 loan if the contractual rate is 12%,the loan will be paid back in four uniform principal payments atthe end of the next four years, and the remaining balance method ofcalculating interest will be used? What is the actuarial, annualpercentage, and the effective interest rate? (AIR, APR,ie =12%)4. A farmer needsto borrow $1,000. The local PCA will make a 2?year loan fullyamortized at 10% (annual rate) with quarterly payments. A $10 loanfee and stock purchase is required. The borrower stock requirementis the lesser of $1,000 or 2% of loan principal. Assume thatsufficient money is borrowed to cover the $1,000, the fee and thestock requirement. Also assume that the stock requirement isreturned to borrower when the loan is paid off and the last debtpayment can be reduced by the stock amount. How much money needs tobe borrowed? What is the dollar amount of the stock requirement?What is the quarterly loan payment? What is the actuarial, annualpercentage, and the effective interest rate? (AIR =2.83%, APR =11.32%, ie = 11.81%)