Neco 2025 Commerce Question 32
Practice objective / multiple choice question 32 from the 2025 Neco Commerce examination.
A merchant wants a 3‑year loan of \(\text{₦}2,000,000\). Bank A offers a nominal annual rate of \(10\%\) compounded semi‑annually and charges a processing fee of \(2\%\) of the principal payable at loan start. Bank B offers a nominal annual rate of \(9\%\) compounded quarterly and charges a flat arrangement fee of \(\text{₦}30,000\) payable at loan start. Which bank results in a lower total cost (total amount repaid including fees) and what is the difference in total cost between the two banks?
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About This Question
This is Neco 2025 Commerce Question 32. It is one of the objective questions from the 2025 Neco Commerce examination.
Difficulty level: Medium .
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