Asked by Sarah Bradley on Jun 10, 2024
Verified
Enrique wants to borrow $15,000 for a new car. The bank has personal loans at 5.25% compounded monthly, whereas the credit union at his company is offering personal loans at 5.5% compounded annually. Which should Enrique accept?
Compounded Monthly
Interest on an investment or loan is calculated and added to the principal amount at the end of each month.
Compounded Annually
An interest calculation method where interest is added to the principal sum once every year, resulting in interest earning interest.
Personal Loans
Unsecured loans given to individuals based on their credit history and income, rather than requiring collateral.
- Analyze and compare different interest rates to make informed financial decisions.
Verified Answer
KR
Learning Objectives
- Analyze and compare different interest rates to make informed financial decisions.