Question

Neither loan required a down payment. Loan B has a 2% prepayment penalty. Neither requires credit insurance. If the borrower makes a list of the advantages and disadvantages of each potential loan, what advantages would they show for Loan A? Select the two correct answers. (1 point) Responses Loan B has no prepayment penalty. Loan B has no prepayment penalty. Loan A has a lower interest rate. Loan A has a lower interest rate. Loan A has a lower total cost. Loan A has a lower total cost. Loan A has a higher total cost. Loan A has a higher total cost. Loan A has a lower monthly payment.

Answer 1

The advantages that the borrower would show for Loan A are:

1. Loan A has a lower interest rate.
2. Loan A has a lower total cost.