[Solved] Solve the Following Application Problems

Question 73

Solve the following application problems. Round to the nearest cent. MAXIMIZING INTEREST Bank of America has $850,000 to lend for 9 months. It can lend it to an automobile dealer at a simple interest rate of 12%, or it can lend it to a small contractor that will pay 12% compounded monthly. How much additional interest would the compound interest loan to the small business generate? Find the effective interest rate for both loans to the nearest hundredth of a percent. __________________

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