Question
Luke let a friend borrow $5,000 that was to be paid back in a single payment after three year period. Luke gave his friend two
Luke let a friend borrow $5,000 that was to be paid back in a single payment after three year period. Luke gave his friend two financing options shown below. The best choice for Luke's friend is _______
Option A: 10% per year simple interest
Option B: 4.5% per half-year, compounded continuously
a) Option A because it saves approximately $771 in interest
b) Option A because it saves approximately $50 in interest
c) Option A because it saves approximately $91 in interest
d) Option A because it saves approximately $117 in interest
e) Option B because it saves approximately $145 in interest
f) Option B because it saves approximately $55 in interest
g) Option B because it saves approximately $72 in interest
h) Option B because it saves approximately $33 in interest
i) Either option because they result in the same single payment
j) Not enough information is given to make a choice
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