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Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest? a. Annual Compounding b. Semi-Annual Compounding c. Monthly Compounding
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Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?

a. Annual Compounding
b. Semi-Annual Compounding
c. Monthly Compounding
d. Daily Compounding

User Knutin
by
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1 Answer

3 votes
In my view the most suitable option is a. Annual Compounding. Here's the formula, how to count compound interest:
P [(1 + i)^n - 1]

P - principal
i - nominal annual in %
n - overall compounding period.

User Serpiton
by
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