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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?

Respuesta :

Answer:

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

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