Download ppt - Number of Payments Interest Rate Amount Borrowed Monthly Payment Total Cost of Interest Creditor A7214%$7,500.00$154.54$3,626.88 Creditor B6014%$7,500.00$174.51$2,970.60

Number of Payments

Interest Rate

Amount Borrowed

Monthly Payment

Total Cost of Interest

Creditor A 72 14% $7,500.00 $154.54 $3,626.88

Creditor B 60 14% $7,500.00 $174.51 $2,970.60

Creditor C 48 14% $7,500.00 $204.94 $2,337.12

Slide 1

1. Assume that you are borrowing $7,500.00 and have a choice in the term, or length of the loan. Which term (A, B, or C) will result in the lowest monthly payment?

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Number of Payments

Interest Rate

Amount Borrowed

Monthly Payment


Creditor A 72 14% $7,500.00 $154.54 $3,626.88

Creditor B 60 14% $7,500.00 $174.51 $2,970.60

Creditor C 48 14% $7,500.00 $204.94 $2,337.12

Slide 2

2. Which loan term do you predict will result in the lowest interest payment?


Number of Payments

Interest Rate

Amount Borrowed

Monthly Payment


Creditor A 72 14% $7,500.00 $154.54 $3,626.88

Creditor B 60 14% $7,500.00 $174.51 $2,970.60

Creditor C 48 14% $7,500.00 $204.94 $2,337.12

Slide 3

3. Which do you think is the better loan option?
