Judy needs to take out a personal loan for $2,500 for tuition assistance. Her bank has offered her one of the four loan packages outlined in the chart below. Determine which of the four loans will be cheapest for Judy in the long run. All interest rates are compounded monthly.LoanDuration (Months)Interest RateA129.50%B248.75%C367.75%D486.60%

Use the compound-interest formula, total owed = $2,500(1 + annual rate/12)^(number of months). Loan A grows to about $2,748; loan B to about $2,976; loan C to about $3,153; and loan D to about $3,254. Therefore, loan A, with a 12-month term and a 9.50% rate, has the lowest total cost despite having the highest interest rate.

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