Colton is buying a new $1,700 camera to start a photography business. He plans to finance the camera and has two options. Option A offers an 18-month loan at a simple interest rate of 4.5%. Option B offers a 3-year loan at a simple interest rate of 2.5%. Which option should he choose and how much will he save compared to the other option?

Answer: Option A

Step-by-step explanation:

Given

P = 1700

T= 18 months

R= 4.5%

Calculation of interest for option A

Simple Interest = P x r x T

=(1700 x (4.5/100) x (18/12))

=(1700 x 0.045 x 1.5)

=$114.75

Interest for Option A is $114.75

P = 1700

T= 3 years

R= 2.5%

Calculation of interest for Option B

Simple Interest = P x r x T

=(1700 x (2.5/100) x (3))

=$127.50

Interest for Option A is $127.50

It is better for Colton to finance his camera using the Option A as it is cheaper interest when compared to Option B.

8

step-by-step explanation:

did you get the answer yet?

step-by-step explanation: