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6. Jordan is planning to open a clothing store in Iriga City but needs additional funds thus decided to borrow money worth P50,000. Two financial institutions offer him a good deal. HUG Bank offers 2.5% interest rate while LOVE Bank offers the same interest rate, 2.5% but compounded annually. Both are payable for 5 years. Which is a better offer for Jordan and why? 7. Lois applied for a loan amounting to P 25 000.00. If the rate of interest is 5% per annum and she has to pay a total solution
6. A better offer for Jordan would be the HUG Bank. Although they offer the same interest rate, LOVE Bank has interest compounded annually. If he chooses LOVE Bank, the total amount that he has to pay would be Php. 56,570.41. Meanwhile, if he chooses HUG Bank he would only pay Php. 56,250.00.
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