naomi is expecting both a raise and a bonus within the next 6 months so she would be comfortable with higher payments but she does not have cash on hand for a down payment. Given these fact which loan should naomi select?

Question

naomi is expecting both a raise and a bonus within the next 6 months so she would be comfortable with higher payments but she does not have cash on hand for a down payment. Given these fact which loan should naomi select?

loan 1: the monthly payment is less
loan 2: the down payment lowers the amount financed
loan 1: there is no down payment required
loan 2: the total finance charge is less

Answer 1

Based on Naomi's situation and preferences, she should select Loan 1, which does not require a down payment. This way, she can have higher monthly payments, which she is comfortable with due to the expectation of a raise and bonus in the next 6 months. Additionally, since Loan 1 does not require a down payment, she can use whatever cash she has on hand for other expenses or to build up her savings.