Last National Bank is offering you a loan at 10%; payments on the loan

Last National Bank is offering you a loan at 10%; payments on the loan are to be made monthly.
Credit Onion is offering you a loan where payments are to be made semiannually; the rate on the
loan is also 10%.

Local Bank down the street is also offering a loan at 10% where the payments are
made quarterly. Which loan has the lowest annual cost?
A) Local Bank’s loan
B) Credit Onion’s loan
C) Last National Bank’s loan
D) All of the loans will have the same annual cost.

ANSWER

B