a man wants to buy a caravan that costs £11,999.
The caravan salesman explains different ways to pay.
£313.44 per month for 4 years or Bank loan for £11,999.
The man wants to find out if taking the bank loan over 4 years will be cheaper than the monthly payments.
The bank charges 5% per year of simple interest on a loan of £11,999 every year for 4 years.
Will taking out a bank loan be cheaper? Explain your answer. Include figures in your explanation.