Question

Kylie needs a $5,000 loan to buy a used car. Which loan option would allow her to pay the least amount of Interest?

Answer 1

Let Kylie use the simple interest option

Explanation:

Given data

Principal= $5,000

I will advise Kylie to pay up the loan using the simple interest option, this is because the interest does not get to compound (pile-up) over time

But with the compounding interest option, the interest tends to increase exponentially