Question

HELP PLEASE! :) Lilith is remodeling her bathroom and needs an $8,700 loan to pay for the cost of the remodel. Which loan option will have Lilith pay the most amount in interest? 30-month loan with a 5.75% interest rate compounded annually 30-month loan with a 5.75% annual simple interest rate 24-month loan with a 6.25% interest rate compounded annually 24-month loan with a 6.25% annual simple interest rate

Answer 1

Which loan option will have Lilith pay the most amount in interest

loan with a 5.75% annual simple interest rate 24-month loan with a 6.25% interest rate

Interest 3,750

Final payment 33,750

Explanation:

1.-Interes rate compouned

Loan 30,000

% 5.75%

Time( Years) 2.50

Interest 4,500

Final payment 34,500

2.-Simple interest

Loan 30,000

% 5.75%

Time( Years) 2.50

Interest 4,313

Final payment 34,313

3.-Simple interest

Loan 30,000

% 6.25%

Time( Years) 2.00

Interest 3,750

Final payment 33,750

4.-Interes rate compouned

Loan 30,000

% 6.25%

Time( Years) 2.00

Interest 3,867

Final payment 33,867