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TiliK225 [7]
2 years ago
13

Bethany needs to borrow $8,000. She can borrow money at 6.9% simple interest for 3 yr or she can borrow at 6.5% with interest co

mpounded continuously for 3 yr. Which option results in less total interest
Business
1 answer:
Evgesh-ka [11]2 years ago
4 0

The loan options which would result in less total interest is borrowing money at 6.9% simple interest.

<u>Given the following data:</u>

  • Principal, P = $8,000.
  • Interest rate, R = 6.9%
  • Time, T = 3 years
  • Interest rate 2 = 6.5%

To determine which of the loan options would result in less total interest:

<u>For </u><u>simple interest</u><u>:</u>

Mathematically, simple interest is given by the formula:

S.I = \frac{PRT}{100}\\\\S.I = \frac{8000 \times 6.9 \times 3}{100}\\\\S.I = 80 \times 6.9 \times 3

S.I = $1,656.

<u>For </u><u>compound interest</u><u>:</u>

Mathematically, an interest that is compounded continuously given by the formula:

A = Pe^{rt}\\\\A = 8000 \times e^{0.065 \times 3}\\\\A = 8000 \times e^{0.195}\\\\A = 8000 \times 1.2153

A = $9,722.49

Interest = A -P\\\\Interest = 9722.49-8000

Interest = $1,722.49

Read more on simple interest here: brainly.com/question/16992474

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