The required formula to calculate the interest is given by is given by:
Convert 6.95% to decimal:
Substitute n=12, t=4, P = 65000, and r = 0.0695 into the equation:
Therefore, the interest paid on the first option is approximately $20762.80
Using a similar procedure, it is found that the interest paid on the second option is approximately $20201.74
Therefore, the better deal is the second option and the interest paid is $20201.74