Question

Miles is buying a new computer for $1550. She’s considering two credit options option eight offers it through your loan with a 10% interest rate while option be offered a five year loan with a 6.5% symbol interest interest rate, which is the better option and how much will he save?

Answer 1

Option B) "five year loan with a 6.5% " is the better option as it results in a total savings of $54.25.

Step-by-step explanation:

To determine which credit option is better, we need to compare the total amount paid for each option.

Option A offers a 10% interest rate and Option B offers a 6.5% interest rate.

We will calculate the total amount paid for each option over the course of the loan.

Option A: Interest rate: 10% / Loan term: 5 years / Loan amount: $1550

Total interest paid: $1550 * 10% = $155

Total amount paid: Loan amount + Total interest paid

= $1550 + $155

= $1705

Option B: Interest rate: 6.5% / Loan term: 5 years / Loan amount: $1550

Total interest paid: $1550 * 6.5% = $100.75

Total amount paid: Loan amount + Total interest paid

= $1550 + $100.75

= $1650.75

Therefore, Option B is the better option as it results in a total savings of:

$1705 - $1650.75

= $54.25.