Final answer:
To compare Loan A and Loan B, the relevant factors to consider include the loan amounts, APR, repayment terms, and total interest paid. Loan A, with a principal of $15,000 and a 17% APR, and Loan B, with a $10,000 principal and a 19% APR, both over five years, result in different total interest payments. Loan A incurs less total interest than Loan B, despite its higher principal, due to its lower APR.
Step-by-step explanation:
The question is asking to compare two loans, Loan A and Loan B, based on the provided information which includes loan amount, annual percentage rate (APR), loan repayment term, and total interest paid. Given that Loan A has a principal of $15,000 with an APR of 17% and Loan B has a principal of $10,000 with an APR of 19%, and both have a repayment term of five years, we can analyze the total interest paid to understand the cost of each loan over time.
When comparing the two loans:
- The statement that the interest is about half the principal for A and almost equal to the principal for B is incorrect, as the total interest paid on Loan A is less than half of its principal, and the interest paid on Loan B is not almost equal to its principal.
- The statement that the annual percentage rate for Loan A is higher than the rate for Loan B is false, as Loan A has a lower APR of 17% compared to Loan B with 19%.
- The statement that the interest for loans A and B will cost the borrower the same amount over time is false as the total interest paid is different for the two loans, with Loan B incurring a higher total interest cost despite its lower principal.
- The most accurate statement based on the data provided would be that the total payment for Loan A is lower than for Loan B, as the lower APR and principal result in a smaller total interest amount.