Question

1. Would it be better to have a loan with 5% interest, paid back in 2

years, OR a loan with 2% interest paid, back in 5 years? Explain.
Show work to justify your answer.

Please use good explanation

Answer 1

It depends on how long it takes you to pay for it.

Explanation:

Basically, because its lower interest, and a higher time period, then you will be paying less than if it were 5% in 2 years. HOWEVER, if you know it will be(lets say 10 years) then the amount due will be the same.

I tried my best to help out, sorry if this is incorrect.(Its been a while sense I've done math like this)

Answer 2

Honestly both are the same amount of money but for the second one u get a longer period of time to pay back the money and it’s still the same amount as the first one so it is probably better to pay back the loan in 5 years with 2%interest paid