Sam is comparing the costs of two loans. The principal amount of each loan is $5,000. One is due in one year and the other is due in four years. Both have the same stated rate of annual interest. Which of the following is true?

Question 7 options:

A)	The interest charges and principal payments cannot be compared for the two loans.

B)	The principal paid for the one-year loan will be higher than the principal paid for the four-year loan.

C)	Total interest paid on the one-year loan will be lower than the total interest paid on the four-year loan.

D)	Total interest paid on the one-year loan will be higher than the total interest paid on the four-year loan.

E)	The principal paid for the one-year loan will be lower than the principal paid for the four-year loan.