Lamar is considering two loans.
Loan A
Loan B
Principal
$4,500
$4,300
Interest rate
5%
6%
Time in years
3
3
Which loan will have the lowest total payback?
Loan A will have the lowest total payback because the amount of interest paid is less than the amount of interest paid for loan B.
Loan A will have the lowest total payback because the total of the principal and the interest paid for loan A is less than the same total for loan B.
Loan B will have the lowest total payback because the interest is less than the interest for loan A.
Loan B will have the lowest total payback because the total of the principal and the interest paid for loan B is less than the same total for loan A.