Riverside Bank Offers to Lend You $50,000 at a Nominal

Multiple Choice

Riverside Bank offers to lend you $50,000 at a nominal rate of 6.5%,compounded monthly.The loan (principal plus interest) must be repaid at the end of the year.Midwest Bank also offers to lend you the $50,000,but it will charge an annual rate of 6.2%,with no interest due until the end of the year.How much higher or lower is the effective annual rate charged by Midwest versus the rate charged by Riverside?

A) -0.55%
B) -0.41%
C) -0.50%
D) -0.62%
E) -0.51%