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3 December, 03:59

Larry is getting a loan to buy a car. The loan will be for $16,000 and will be paid off over 4 years. One bank offers him an annual interest rate of 6%, which would make his payments $375.76. Another bank offers him an annual interest rate of 8%, which would make his monthly payments $390.61. What is the overall financial benefit for Larry of taking the 6% loan?

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  1. 3 December, 07:36
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    For the 6% interest rate. Larry will be putting more money towards the principal of his loan rather than paying more on interest. This will save him money in the long run. If he chose the 8% loan, he would be paying more towards the interest and throwing unnecessary money away when he has the option of paying 6% in interest instead of the 8%.
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