You Go to Three Different Banks to Borrow R10,000 for One

Multiple Choice

You go to three different banks to borrow R10,000 for one year.Each says it will lend you the money at 10 percent, but their terms differ as follows: Banks A and C require a single payment at the end of the year.Bank B requires 12 equal monthly payments beginning at the end of the first month.What is the difference between the highest and lowest effective annual rate in this case?

A) 13.0%
B) 9.5%
C) 9.0%
D) 8.5%
E) 8.0%