Compare total interest paid in part with total interest paid

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Reference no: EM13833527

You plan to borrow $5000 to buy a car. The bank advertises two car loan plans with different nominal interest rates (APRs) and pay-offs periods. Plan A loans the money at the effective rate interest of 12 % compounded monthly, to be repaid over the next four years. Plan B loans the money at the nominal interest rates 11% compounded continuously, to be repaid over the next three years

A) If you choose plan A, what would be your monthly payment?

B) if you choose plan B, what would be your monthly payment?

C) compare the total interest paid in part (a) with the total interest paid in part (b); i.e., compare the difference in interest paid with loans using plan A versus plan B

Reference no: EM13833527

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