To determine which loan option would allow Rita to pay the least amount of interest, we need to calculate the total interest for each option and compare them.
Option A:
Loan amount: $7,500
Simple interest rate: 6.50% per year
Loan period: 24 months
Total interest = Loan amount * (interest rate/100) * loan period
Total interest = $7,500 * (6.50/100) * 2
Total interest = $975
Option B:
Loan amount: $7,500
Simple interest rate: 4.00% per year
Loan period: 36 months
Total interest = Loan amount * (interest rate/100) * loan period
Total interest = $7,500 * (4.00/100) * 3
Total interest = $900
Option C:
Loan amount: $7,500
Simple interest rate: 3.50% per year
Loan period: 48 months
Total interest = Loan amount * (interest rate/100) * loan period
Total interest = $7,500 * (3.50/100) * 4
Total interest = $1,050
Option D:
Loan amount: $7,500
Simple interest rate: 3.00% per year
Loan period: 60 months
Total interest = Loan amount * (interest rate/100) * loan period
Total interest = $7,500 * (3.00/100) * 5
Total interest = $1,125
Based on the calculations, Option B, a 36-month loan with a 4.00% annual simple interest rate, would allow Rita to pay the least amount of interest, which is $900.
Rita needs a $7,500 personal loan. Which loan option would allow her to pay the LEAST amount of interest?
Responses
A A 24-month loan with a 6.50% annual simple interest rate.A 24-month loan with a 6.50% annual simple interest rate.
B A 36-month loan with a 4.00% annual simple interest rate.A 36-month loan with a 4.00% annual simple interest rate.
C A 48-month loan with a 3.50% annual simple interest rate.A 48-month loan with a 3.50% annual simple interest rate.
D A 60-month loan with a 3.00% annual simple interest rate.
1 answer