Answer:
D. Choosing a loan with a simple rather than compound interest rate
Step-by-step explanation:
Simple interest is calculated based on the principal amount only. It is easy to calculate and understand. Simple interest remains a flat figure throughout the loan period.
The payable monthly simple interest amount tends to be smaller compared to compound interest. Simple interest is calculated on the principal amount only but compound interest is based on the principal amount plus the previous periods' accumulated interest. This implies that one pays interest on the interest.