Question

Plan: “MI AUTO PARA TAXI”

Answer 1

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:

The question in English is

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  

$A=P(1+\frac{r}{n})^{nt}$  

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

$t=2\ years\\ P=\ 45,000-\ 20,000=\ 25,000\\ r=0.05\\n=1$  

substitute in the formula

$A=25,000(1+\frac{0.05}{1})^{1*2}$  

$A=25,000(1.05)^{2}$  

$A=\ 27,562.50$  

Plan II

$t=3\ years\\P=\ 45,000-\ 20,000=\ 25,000\\ r=0.03\\n=1$  

$A=25,000(1+\frac{0.03}{1})^{1*3}$  

$A=25,000(1.03)^{3}$  

$A=\ 27,318.18$  

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.