(a) For Loan A, the interest rate is 6.15% per year and the loan term is 7 years. Find the total amount to repay Loan A. $0 (b) For Loan B, the interest rate is 6.15% per year and the loan term is 5 years. Find the total amount to repay Loan B. $0 (c) For which loan would she pay less, and by how much? Loan A The total amount paid is $less. O Loan B The total amount paid is $less.
(a) For Loan A, the interest rate is 6.15% per year and the loan term is 7 years. Find the total amount to repay Loan A. $0 (b) For Loan B, the interest rate is 6.15% per year and the loan term is 5 years. Find the total amount to repay Loan B. $0 (c) For which loan would she pay less, and by how much? Loan A The total amount paid is $less. O Loan B The total amount paid is $less.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
![### Loan Comparison Exercise
Diane is deciding between two personal loans. For each loan, the loan amount is $7500.
#### Task:
Use the ALEKS loan calculator for the following. Also utilize the regular ALEKS calculator, as necessary. Write your answers to the nearest cent.
#### Instructions:
**ALEKS Loan Calculator**
- **Loan amount:** $ [______]
- **Loan term:** [___] years
- **Interest rate:** [___] %
- **Monthly payment:**
[Calculate button]
---
1. **(a) Loan A Details:**
- Interest rate: 6.15% per year.
- Loan term: 7 years.
**Objective:** Find the total amount to repay Loan A.
**Answer:** $ [______]
2. **(b) Loan B Details:**
- Interest rate: 6.15% per year.
- Loan term: 5 years.
**Objective:** Find the total amount to repay Loan B.
**Answer:** $ [______]
3. **(c) Comparison Objective:**
- Determine for which loan Diane would pay less, and by how much:
- [ ] Loan A
The total amount paid is $ [______] less.
- [ ] Loan B
The total amount paid is $ [______] less.
Use the calculations to determine the more cost-effective loan option based on the total repayment amount.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff996b914-e3a0-44c6-acc6-2ba9d8d3eb2a%2Fd0b40a04-4cc1-4000-b116-26a73f1ffcd1%2F005oa4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Loan Comparison Exercise
Diane is deciding between two personal loans. For each loan, the loan amount is $7500.
#### Task:
Use the ALEKS loan calculator for the following. Also utilize the regular ALEKS calculator, as necessary. Write your answers to the nearest cent.
#### Instructions:
**ALEKS Loan Calculator**
- **Loan amount:** $ [______]
- **Loan term:** [___] years
- **Interest rate:** [___] %
- **Monthly payment:**
[Calculate button]
---
1. **(a) Loan A Details:**
- Interest rate: 6.15% per year.
- Loan term: 7 years.
**Objective:** Find the total amount to repay Loan A.
**Answer:** $ [______]
2. **(b) Loan B Details:**
- Interest rate: 6.15% per year.
- Loan term: 5 years.
**Objective:** Find the total amount to repay Loan B.
**Answer:** $ [______]
3. **(c) Comparison Objective:**
- Determine for which loan Diane would pay less, and by how much:
- [ ] Loan A
The total amount paid is $ [______] less.
- [ ] Loan B
The total amount paid is $ [______] less.
Use the calculations to determine the more cost-effective loan option based on the total repayment amount.
Expert Solution
Step 1
Information Provided:
- Loan amount = $7500
- Loan A & B rate = 6.15%
- Loan A Period = 7 years
- Loan B Period = 5 years
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education