Question

Which is the best option where you would pay back the loan with the least expenditure?

A. $4000 at 3% interest for 6 years?

B. $4000 at 8% interest for 5 years?

C. $4000 at 4% interest for 4 years?

D. $4000 at 8% interest for 3 years?

Answer 1

a.$4000 at 3% interest for 6 years

Answer 2

ok its Option 3: $4000 at 4% interest for 4 years

Explanation:

The correct answer is option 3. The formula I = prt is used to determine the better deal. In the first case you have I = (4000)(.03)(6) which is $720 in interest. In the second case you have I = (4000)(.08)(5) which is $1600 in interest. In the third case you have I = (4000)(.04)(4) which is $640 in interest. In the fourth case you have I = (4000)(.08)(3) which is $960 in interest. So the better deal would be the third option because there is less interest to pay bac