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.

---

Definitions:

Overloaded

The condition where a vehicle or component carries more weight or is subjected to more stress than its intended capacity, risking damage or failure.

Alignment Clips

Small components used to ensure proper positioning and alignment of parts during assembly or installation.

Multi-leaf Suspension

A type of vehicle suspension system made up of several layers of metal springs to provide support and absorb shocks.

Rubber Load Cushion

A component made of rubber designed to absorb shock and reduce vibration in various applications, including the loading of goods.