Question

Tara needs an $8,000 personal loan.

Which loan option would require her to pay back the least amount of money?


36-month loan with a 9% annual simple interest rate

42-month loan with a 7% annual simple interest rate

48-month loan with an 8% annual simple interest rate.

54-month loan with a 6% annual simple interest rate

Answer 1

The least amount is paid back in a 42-month loan with a 7% annual simple interest rate.

What is simple interest?

The term simple interest refers to a type of interest that is paid only on the principal and not on the interest. We have to note that the time and the interest rate all contribute to increasing the amount of money to be paid back.

In the first case, the amount to be paid back is;

A = $8,000 + ($8,000 * 9 * 3/100)

= $10160

In the second case;

A = $8,000 + ( $8,000 * 7 * 3.5/100)

A =$ 9960

In the third case;

A = $8,000 + ($8,000 * 8 *4/100)

A = $10560

In the fourth case;

A = $8,000 + ($8,000 * 6 * 4.5/100)

A = $10160

Hence, the least amount is paid back in a 42-month loan with a 7% annual simple interest rate.

Learn more about simple interest: https://brainly.com/question/26437826?