Answer:
EAR in first case 9.08%
Second case 8.42%
Step-by-step explanation:
EAR in first case = 1.08 * 1.01 = 9.08%
In second case = 8/(1 - 0.05)= 8.42%
The second case has a higher EAR because the fee and interest rate is higher than in the second case.***