You visited a local bank. Because of your good credit, they agreed to give you a personal loan, simple interest, at the current interest rate of 12.5% APR. You will pay this back in 1 year. Interest = p r t =700 * 0.125 * 1 = $87.5Total Payment =Principal + Interest = $787.5Payment per month =Total Payment / 12 = $65.62III. Option 3: Installment Plan (10 pts)The store you are buying the item down offers you an installment plan. The terms of the contract for the plan are:$50 down12 payments Finance charge of $100Interest = Finance Charge = $100Total Payment=Cost of item + Finance charge = 700 + 100 = $800Monthly Payment =(Total Payment – Down payment / 12 = (800-50)/12 = $62.5Time to Choose! (10 pts)Compare the three options. a.Which is the most convenient?Each has its advantages, but the lowest monthly payment is for option 1b. Which has the shortest payment time?Options 2 and 3c. Which has the lowest total payment and interest?Lowest is option 2d. Which has the lowest monthly payment?Lowest is option 1e. Make a choice. Assuming that you could not pay for your item any other way, which would you choose and why?