Ed needs to take out a loan for $7,000 to purchase a car. his bank has offered him a loan at 10.0% interest, compounded monthly, for 36 months or 10.5% interest, compounded monthly, for 24 months. ed’s goal is to save as much money as possible by the time he pays off the loan. which of the following statements best describes what ed should be thinking?
a. since the monthly payment for the 36 month loan is lower, this loan will save more.
b. since the monthly payment for the 24 month loan is lower, this loan will save more.
c. since the finance charge for the 36 month loan is lower, this loan will save more.
d. since the finance charge for the 24 month loan is lower, this loan will save more.
Answers: 1
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