To pay for a home improvement project that totals $11,000, Genesis is choosing between taking out a simple interest bank loan at 6% for 3 years or paying with a credit card that compounds monthly at an annual rate of 16% for 6 years. Which plan would give Genesis the lowest monthly payment?
The monthly credit card payment would be $396.49, which is lower than the monthly payment on the bank loan.
The monthly payment on a bank loan would be $360.56, which is lower than the monthly credit card payment.
The monthly credit card payment would be $354.44, which is lower than the monthly payment on the bank loan.
The monthly payment on a bank loan would be $323.89, which is lower than the monthly credit card payment.
1 answer
The correct answer is: The monthly payment on a bank loan would be $323.89, which is lower than the monthly credit card payment.
1 answer