Question
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.
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.
Answers
GPT 3.5
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.
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.