In comparing Truth-in-Lending statements for a home improvement loan, the borrower focuses on the following:
Amount Borrowed ($) APR (%) Finance Charge ($) Number of Payments Monthly Payment ($) Total Cost ($)
Loan A 25,000.00 4.8 3,169.61 60 469.49 28,169.40
Loan B 25,000.00 5.1 4,779.98 84 354.52 29,779.98
Neither loan required a down payment. Loan B has a 2% prepayment penalty. Neither requires credit insurance.
If the borrower makes a list of the advantages and disadvantages of each potential loan, what advantages would they show for Loan A? Select the two correct answers.
(1 point)
Responses
Loan A has a lower interest rate.
Loan A has a lower interest rate.
Loan A has a lower monthly payment.
Loan A has a lower monthly payment.
Loan A has a lower total cost.
Loan A has a lower total cost.
Loan B has no prepayment penalty.
Loan B has no prepayment penalty.
Loan A has a higher total cost.
- Loan A has a lower interest rate
- Loan A has a lower total cost