Answer:
Option B, the minimum monthly payments will be LOWER
Step-by-step explanation:
We can proof this by using hypothetical scenario below:
John has $1,500 with APR of 10% payable in 48 month equal instalment
Timmy has $1,500 with APR of 8% payable in 48 month equal instalment
Let us calculate monthly payment in each case
=pmt(rate,nper,-pv,fv)
rate is the monthly rate which APR/12
nper is 48
pv is the balance on the card which is $1,500
fv is the total monthly repayment which is unknown
John monthly payment=pmt(10%/12,48,-1500,0)=$38.04
Timmy monthly payment=pmt(8%/12,48,-1500,0)=$ 36.62
Since Timmy with a lower APR has a lower monthly payment, option B is correct
