Question
Dahlia is trying to decide which bank she should use for a loan she wants to take out. In either case, the principal of the
Dahlia is trying to decide which bank she should use for a loan she wants to take out. In either case, the principal of the loan will be $19,450, and Dahlia will make monthly payments. Bank P offers a nine-year loan with an interest rate of 5.8%, compounded monthly, and assesses a service charge of $925.00. Bank Q offers a ten-year loan with an interest rate of 5.5%, compounded monthly, and assesses a service charge of $690.85. Which loan will have the greater total finance charge, and how much greater will it be? Round all dollar values to the nearest cent.
a. | Loan Qs finance charge will be $83.73 greater than Loan Ps. |
b. | Loan Qs finance charge will be $317.88 greater than Loan Ps. |
c. | Loan Ps finance charge will be $20.51 greater than Loan Qs. |
d. | Loan Ps finance charge will be $234.15 greater than Loan Qs. |
Please select the best answer from the choices provided
A
B
C
D
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