Answer:
The claim is not rtue for Mary's financial situation
However, she will save up to 6.15% per month if the lona is taken.
Explanation:
4,300 21 %
5,800 25 %
3,100 17 %
we will do interest expense per month under the current situation
and the situation if the loan is taken.
4,300 x 0.21/12 = 75.25
5,800 x 0.25/12 = 120.83
3,100 x 0.17/12 = 43.92
total interest 240
offer of 16.5% APR
4,300 + 5,800 + 3,100 = 13,200
we calculate the monthly cuota of a 10 year loan at 16.5% APR which present value is 13,200
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV $13,200.00
time 120 (10 years x 12 months per year)
rate 0.01375 (0.165 / 12 month per year)
[tex]13200 \div \frac{1-(1+0.01375)^{-120} }{0.01375} = C\\[/tex]
C $ 225.25
Now we compare the savings:
240 - 225.25 = 14.75
14.75 / 240 = 0,0614583 = 6.15%
