Question

What is one strategy that can help a person avoid spending too much money
on interest when borrowing money?
O A. Choosing a loan with a compound rather than simple interest rate
O B. Choosing a credit card with a high minimum monthly payment
OC. choosing a credit card with a low minimum monthly payment
OD. Choosing a loan with a simple rather than compound interest rate

Answer 1

Explanation:

A. Choosing a loan with a compound rather than

Answer 2

Answer:

D. Choosing a loan with a simple rather than compound interest rate

Explanation:

Simple interest is calculated based on the principal amount only. It is easy to calculate and understand. Simple interest remains a flat figure throughout the loan period.

The payable monthly simple interest amount tends to be smaller compared to compound interest. Simple interest is calculated on the principal amount only but compound interest is based on the principal amount plus the previous periods' accumulated interest. This implies that one pays interest on the interest.