SOLUTION: Peter wants to borrow $3,000. He has two payment plans to choose from. Plan A is 4% interest over 6 years. Plan B is 5% interest over 4 years. Using the formula mc024-1.jpg for pay

Algebra ->  Rational-functions -> SOLUTION: Peter wants to borrow $3,000. He has two payment plans to choose from. Plan A is 4% interest over 6 years. Plan B is 5% interest over 4 years. Using the formula mc024-1.jpg for pay      Log On


   

Question 1131530: Peter wants to borrow $3,000. He has two payment plans to choose from. Plan A is 4% interest over 6 years. Plan B is 5% interest over 4 years. Using the formula mc024-1.jpg for payment, m, which statement best compares the plans?
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
compare (1+.04)^6 with (1+.05)^4, since they are both multiplied by $3000
that is 1.27 vs. 1.22
the first one will be more expensive to repay. An extra year or two makes a significant difference.