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Constance is planning to pay for part of her college using a $12,000 student loan. She is comparing the total costs of two loan options. Option A is to borrow the $12,000 for 5 years at 4.75% annual compound interest. Option B is to borrow the $12,000 for 4 years at 5% annual compound interest. Which of the following is closest to the difference in total cost of Option A compared to Option B?

A. $450.00
B. 867.72
C. $529.87
D. $547.84

User Xpepermint
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1 Answer

12 votes
12 votes

Answer:

Explanation:


A=P(1+r)^t\\ d=12000((1.0475)^5-(1.05)^4\\ \\ d=\$ 547.84

User Latania
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