Math question, note: there are two answers!!
1 answer:
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Answer:
Plan II is more favorable because the total amount to pay is less and the time to pay is greater than Plan I.
Step-by-step explanation:
<u><em>The question in English is</em></u>
Plan: "MY AUTO FOR TAXI"
Mr. Alberto decides to buy a car in order to perform taxi services. The price of the vehicle is S/45 000, but only S/20 000 is available. He then decides to finance the missing money through a bank. If between the two loan plans offered, you must choose one:
Which of the two options would you recommend to Mr. Alberto?
we know that
The compound interest formula is equal to
where
A is the total amount due
P is the amount owed
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
Plan I
substitute in the formula
Plan II
Compare
Plan I ----> t=2 years A=$27,562.50
Plan II----> t=3 years A=$27,318.18
therefore
Plan II is more favorable because the total amount to pay is less and the time to pay is greater than Plan I.