Question

Toni needs a $5,500 toan in order to buy a car. Which loan option would allow her to pay the least amount of interest?

Answer 1

hello

Toni needs $5,500 loan to get a car.

we can solve this by observing the options available to the question

from option A

we have 24 months loan wtih 4.25% interest rate

let's calculate for this

simple interest is given as

`\begin{gathered} s\mathrm{}i=(1+rt) \\ p=\text{ principal} \\ r=\text{rate} \\ t=\text{time} \\ p=5,500 \\ r=4.25 \\ t=24\text{ months = 2 years} \\ s\mathrm{}i=5500(1+0.0425*2) \\ s\mathrm{}i=5967.5 \end{gathered}`

the interest on the first option would be

`in\text{terest}=5967.5-5500=467.5`

for option b

4.75% for 36 months = 3 years