Question

Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?

Answer 1

The best option for her to choose is the one called Anual Compounding. With the rest of the compoundings she will have to pay more money. With a semi-annual rate she wil have to pay almost 1000 dollars more than in an anual compounding. With a quarterly period she will have to pay almost the same amount as a semi-annual period. Now with a monthly period she would have to pay almost 2000 dollars of interest.

This was not copied from a website or someone else. This was from my last year report.