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Question 1 APR and EAR, consumer loan(20 marks) Explain the difference between APR and EAR....

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Question 1 APR and EAR, consumer loan(20 marks) Explain the difference between APR and EAR. Why does this matter for TVM? You have been approved for a loan of $22,000 to buy your dream car, used of course. You have the following options for repayment available: O O o Monthly payment for 6 years Annual payments for 5 years Semi-annual payments for 4 years o Bi-weekly payments for 5 years The APR is 3.95% for all options. Interest is compounded monthly. a) What is the payment amount under each option? b) Which option would you choose and why? c) How much interest do you pay during the first year for the semi-annual payment option? d) Besides the cost of the car, what other aspects would you consider in your purchase decision

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