Sylvie needed a new car as her old car was no longer reliable. Sylvie asked her parents for a simple interest loan over 5 years in the amount of $25,000 at 7%. Her parents refused as they would be losing out on interest. Sylvie then went to the Royal Bank of Canada (RBC) for a loan. The interest rate on the loan from RBC would be 7% compounded monthly with monthly payments required. What is the difference in compounding interest over simple interest?

Points: 1 $1,690.63

$1,005.68

$1,310.23

There is no difference.

$1,300.75