The advantages for Loan A compared to Loan B are:
- Loan A has a lower interest rate.
- Loan A has a lower total cost.
Therefore, the correct answers are:
- Loan A has a lower interest rate.
- Loan A has a lower total cost.
Use the comparison table to answer the question. In comparing Truth-in-Lending statements for a home improvement loan, the borrower focuses on the following: Amount Borrowed ($) APR (%) Finance Charge ($) Number of Payments Monthly Payment ($) Total Cost ($) Loan A 25,000.00 4.8 3,169.61 60 469.49 28,169.40 Loan B 25,000.00 5.1 4,779.98 84 354.52 29,779.98 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 A has a higher total cost. Loan A has a higher total cost. Loan A has a lower monthly payment. Loan A has a lower monthly payment. 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.
1 answer