Answer:
The most convenient option for Logan is A, since he will pay a lower amount than if he chose option B.
Step-by-step explanation:
Given that Logan is taking a loan out to buy a $ 4000 right for his wife, and he has two finance options, Option A, which gives a five year loan with a% 7 interest rate compounded quarterly, and Option B, which gives an eight year loan with a 5.5% interest rate compounded annually, to determine which option should be chosen, the following calculation must be performed:
Option A:
X = 4,000 (1 + 0.07 / 3) ^ 5x3
X = 5,653.49
Option B:
X = 4,000 (1 + 5.5 / 1) ^ 8x1
X = 6,138.75
Thus, the most convenient option for Logan is A, since he will pay a lower amount than if he chose option B.
