Candice wants to buy a $2500 scooter with a loan from her local bank. Which loan option would be best for Candice if she wants the lowest interest rate and wants to pay off the scooter within 5 years.
Answer
A
Loan option 1 will take less than 4 years to pay off and have an annual interest rate of 15%, and total interest of about $700.
B
Loan option 2 will take 3 years to pay off, at which point she will have paid $1,050 in interest.
C
Loan option 3 will take 7 years to pay off, and the total paid for the scooter will be $3200.
D
Loan option 4 will take 5 years to pay off, and the total paid for the scooter will be $3500.