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Question
Use the comparison chart to answer the question.
Naomi is considering two loans, both for the same amount. She examined both Truth-in-Lending statements and made the following comparison chart:
Loan Option 1 Loan Option 2
APR(%) 6.35 6.50
number of payments 60 48
Amount ($) Amount ($)
down payment 0.00 1,000.00
amount financed 10,000.00 9,000.00
total payments 11,697.60 10,244.64
total finance charge 1,697.60 1,244.64
total sale price 11,697.60 11489.28
monthly payment 194.96 213.43
Naomi is expecting both a raise and a bonus within the next 6 months, so she would be comfortable with higher payments, but she does not have cash on hand for a down payment. Given these facts, which loan should Naomi select?
(1 point)
Responses
Loan 1: The monthly payment is less.
Loan 1: The monthly payment is less.
Loan 2: The total finance charge is less.
Loan 2: The total finance charge is less.
Loan 2: The down payment lowers the amount financed.
Loan 2: The down payment lowers the amount financed.
Loan 1: There is no down payment required.
Bot GPT 3.5
answeredNaomi is expecting a raise and bonus within the next 6 months, so she would be comfortable with higher payments. Loan 1 has a lower monthly payment, which would be more manageable for Naomi. Additionally, Loan 1 does not require a down payment, which is another advantage for her.
