Question

What happens if minh finances the car for four year instead of three and all other term remain the same how much will she pay in finance charges? A) $0

B) Slightly more than the original finance charges for three years
C) Approximately the same as the original finance charges for three years
D) Significantly more than the original finance charges for three years

Answer 1

If Minh finances the car for four years instead of three, she will end up paying significantly more in finance charges.

Step-by-step explanation:

If Minh finances the car for four years instead of three, and all other terms remain the same, she will end up paying significantly more than the original finance charges for three years (option D). By extending the loan term, the total finance charges increase because the interest is accrued for a longer period of time. This means that Minh will be paying more in interest over the course of the loan, resulting in significantly higher finance charges.