Question
Rachael Steele wants to borrow $6,000 for a period of four years. She has two choices. Her bank is offering to lend her the amount
Rachael Steele wants to borrow $6,000 for a period of four years. She has two choices. Her bank is offering to lend her the amount at 7.25 percent compounded annually. She can also borrow from her firm and will have to repay a total of $8,130.93 at the end of four years. Based on the information provided, which of the following is true?
A:She should borrow from her firm as it is charging a lower interest of 7%.
B: She should borrow from the firm as it is charging a lower interest rate of 6%.
C: She should borrow from the bank as her firm is charging a higher interest of 7.89%.
D:She should borrow from the bank as her firm is charging a higher interest of 9.70%.
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