Clarissa needs a $2,500 loan in order to buy a car. which loan option would allow her to pay the least amount of interest?
a) an 18-month loan with a 4.75% annual simple interest rate
b) a 30-month loan with a 4.00% annual simple interest rate
c) a 24-month loan with a 4.25% annual simple interest rate
d) a 36-month loan with a 4.50% annual simple interest rate

Option A.

Step-by-step explanation:

Clarissa needs a $2,500 loan in order to buy a car.

There are 4 options of loan we will calculate all the options that pay the least amount of interest.

To calculate the interest we will use this formula :

Where P = Principal amount

R = rate of interest

T = time in years

A) Principal 2,500 interest 4.75% and time 18 months (1.5 years)

= $178.125

B) Principal 2,500 interest 4% and time 30 months (2.5 years)

= $250

C) Principal 2,500 interest 4.25% and time 24 months (2 years)

= $212.50

D) Principal 2,500 interest 4.50% and time 36 months (3 years)

= $337.50

The least amount of interest would be in option A.

europa2433

europa2433

step-by-step explanation: