Multiple Choice
Sam is comparing the costs of two loans.One is due in one year and the other is due in four years.Both have the same stated rate of interest.Which of the following is true?
A) The principal paid for the one-year loan will be lower than the principal paid for the four-year loan.
B) The principal paid for the one-year loan will be higher than the principal paid for the four-year loan.
C) The interest paid for the one-year loan will be lower than the interest paid for the four-year loan.
D) The interest paid for the one-year loan will be higher than the interest paid for the four-year loan.
E) The interest and principal payments cannot be compared for the two loans.
Correct Answer:
Verified
Correct Answer:
Verified
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