If you ran a bank, which rate would you rather advertise on monthly-compounded loans, the EAR or the APR? Which rate would you rather advertise on quarterly-compounded savings accounts, the EAR or the APR? Explain. As a consumer, which would you prefer to see and why?

EAR

Effective Annual Rate, a measure of interest that accounts for compounding over a year, providing a more accurate depiction of financial product returns.

APR

Annual Percentage Rate; a comprehensive measure of the cost of borrowing on an annual basis, including interest and other fees.

Monthly-Compounded

Monthly-Compounded refers to the process of applying interest on an investment or loan on a monthly basis, where each month's interest is added to the principal.