Answer: To find out which loan option will have the least interest, you need to calculate the interest amount for each option. You can do this by using the formula:
Interest = Principal x Interest Rate x Time (in years)
For option A, the interest amount would be:
Interest = $12,000 x 0.05 x (48/12) = $2,400
For option B, the interest amount would be:
Interest = $12,000 x 0.045 x (60/12) = $3,000
For option C, the interest amount would be:
Interest = $12,000 x 0.0375 x (66/12) = $2,970
For option D, the interest amount would be:
Interest = $12,000 x 0.04 x (72/12) = $3,840
As we can see the lowest interest amount is option C which is $2,970. Thus Ciara will pay the least interest if she chooses option C.
Explanation: