3.

Suppose that you decide to borrow $13,000 for a new car. You can select one of the following loans, each requiring regular monthly payments. Instaliment Loan A: three-year loan at 5.9% Instaliment Loan B: five-year loan at 7.2% Use PMT =[1(1+nr)nt]P(nr) to complete parts (a) through (c a. Find the monthly payments and the total interest for Loan A. The monthly payment for Loan A is $ (Do not round until the final answer. Then round to the nearest cent as needed.) The total interest for Loan A is $ (Round to the nearest cent as needed.) b. Find the monthly payments and the total interest for Loan B. The monthly payment for Loan B is \$ (Do not round until the final answer. Then round to the nearest cent as needed.) The total interest for Loan B is $ (Round to the nearest cent as needed.) c. Compare the monthly payments and the total interest for the two loans. Determine which loan is more economical. Choose the correct answer below. A. The five-year loan at 7.2% is more economical. B. The three-year loan at 5.9% is more economical. The buyer will save approximately $ in interest. (Round to the nearest cent as needed.)