You want to borrow $2,000. You can get 3-year loan with a 15% simple interest rate or a 5-year loan with a 10% simple interest rate. Which loan costs less?

Question

Mathematics

Carter Dougherty

23 October, 01:22

You want to borrow $2,000. You can get 3-year loan with a 15% simple interest rate or a 5-year loan with a 10% simple interest rate. Which loan costs less?

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Answers (1)

Know the Answer?

Carina Cross · Answer 1

3-years loan

Step-by-step explanation:

3 years:

P = $2000

R = 15%

t = 3 years

A = P (1 + R/100) t

= $2000 (1 + 0.15) ³

= $3041.75

5 years:

P = $2000

R = 10%

t = 5 years

A = P (1 + R/100) t

= $2000 (1 + 0.10) 5

= $3221.02