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Sagot :
The payment option that pays the LEAST is B. B. 10% APR, with 12 monthly payments, as it pays back a total of $1,008.33, for borrowing $1,000.
How to calculate payment options:
Payment options can be computed using an online finance calculator as follows:
The option that pays the least total cost should be chosen.
Data and Calculations:
Loan payment = $1,000
A. 8% APR, no payments for the first 6 months, then 6 monthly payments:
Amount after 6 months = $1,040 ($1,000 + $1,000 x 0.08 x 1/2)
N (# of periods) = 1
I/Y (Interest per year) = 8%
PV (Present Value) = $1,040
FV (Future Value) = $0
Results:
PMT = $174.49
Sum of all periodic payments = $1,046.93 ($174.49 x 6)
Total Interest =$46.93 ($40 + $6.93)
B. 10% APR, with 12 monthly payments:
N (# of periods) = 1
I/Y (Interest per year) = 10%
PV (Present Value) = $1,000
FV (Future Value) = $0
Results:
PMT = $84.03
Sum of all periodic payments = $1,008.33
Total Interest = $8.33
C. 12% APR, with 6 monthly payments:
N (# of periods) = 1
I/Y (Interest per year) = 12%
PV (Present Value) = $1,000
FV (Future Value) = $0
Results:
PMT = $168.33
Sum of all periodic payments = $1,010.00
Total Interest $10.00
Thus, the payment option that pays the LEAST is Option B.
Learn more about periodic payments at https://brainly.com/question/24244579
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