Loan rates of interest Personal Finance Problem John Flemming has been shopping for a loan to finance the purchase of a used car. He has found three possibilities that seem attractive and wishes to select the one with the lowest interest rate. The information available with respect to each of the three $7,000 loans is shown in the following table, Each loan requires John to make one payment at the end of each year.

Loan Principal Annual payment Term (years)

A $7,000 $2,304.91 4 B $7,000 $1,846.48 5 C $7,000 $2,618.78 3

a.Determine the interest rate associated with each of the loans.

b.Which loan should John take?

a.The interest rate, r, on loan A is