Dandre needs to borrow $25,000 to buy a car. He can borrow the money at 5.5% simple interest for five years, or at 5.3% interest compounded monthly for five years. You may use the formulas given in class for this problem, and a scientific calculator, but you may not use an online loan calculator. (a) How much total interest would Dandre pay at 5.5% simple interest? (b) How much total interest would Dandre pay at 5.3% interest com- pounded monthly? (c) Which option results in less total interest?
Dandre needs to borrow $25,000 to buy a car. He can borrow the money at 5.5% simple interest for five years, or at 5.3% interest compounded monthly for five years. You may use the formulas given in class for this problem, and a scientific calculator, but you may not use an online loan calculator. (a) How much total interest would Dandre pay at 5.5% simple interest? (b) How much total interest would Dandre pay at 5.3% interest com- pounded monthly? (c) Which option results in less total interest?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Dandre needs to borrow $25,000 to buy a car. He can borrow the money
at 5.5% simple interest for five years, or at 5.3% interest compounded
monthly for five years. You may use the formulas given in class for this
problem, and a scientific calculator, but you may not use an online loan
calculator.
(a) How much total interest would Dandre pay at 5.5% simple interest?
(b) How much total interest would Dandre pay at 5.3% interest com-
pounded monthly?
(c) Which option results in less total interest?
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