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The loan options which would result in less total interest is borrowing money at 6.9% simple interest.
Given the following data:
To determine which of the loan options would result in less total interest:
For simple interest:
Mathematically, simple interest is given by the formula:
[tex]S.I = \frac{PRT}{100}\\\\S.I = \frac{8000 \times 6.9 \times 3}{100}\\\\S.I = 80 \times 6.9 \times 3[/tex]
S.I = $1,656.
For compound interest:
Mathematically, an interest that is compounded continuously given by the formula:
[tex]A = Pe^{rt}\\\\A = 8000 \times e^{0.065 \times 3}\\\\A = 8000 \times e^{0.195}\\\\A = 8000 \times 1.2153[/tex]
A = $9,722.49
[tex]Interest = A -P\\\\Interest = 9722.49-8000[/tex]
Interest = $1,722.49
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