Sam Is Comparing the Costs of Two Loans

question 2

Multiple Choice

Sam is comparing the costs of two loans.One is due in one year and the other is due in four years.Both have the same stated rate of interest.Which of the following is true?

• A) The principal paid for the one-year loan will be lower than the principal paid for the four-year loan.
• B) The principal paid for the one-year loan will be higher than the principal paid for the four-year loan.
• C) The interest paid for the one-year loan will be lower than the interest paid for the four-year loan.
• D) The interest paid for the one-year loan will be higher than the interest paid for the four-year loan.
• E) The interest and principal payments cannot be compared for the two loans.

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Definitions:

Howard Gardner

An American developmental psychologist best known for his theory of multiple intelligences, which suggests that intelligence is not a single general ability but rather multiple distinct abilities.

IQ Tests

Standardized assessments designed to measure human intelligence and cognitive abilities.

Howard Gardner

An American developmental psychologist best known for his theory of multiple intelligences, which suggests that intelligence is not a single ability but a combination of several abilities.

Verbal Skills

The ability to communicate effectively using language, including speaking, listening, reading, and writing abilities.