Al needs to borrow \$15,000 to buy a car. He can borrow the money at 6.7% simple interest for 5 yr or he can borrow at 6.4% interest compounded continuously for 5 yr. a. How much total interest would Al pay at 6.7% simple interest?   b. How much total interest would Al pay at 6.4% interest compounded continuously? c.  Which option results in less total interest?

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Al needs to borrow \$15,000 to buy a car. He can borrow the money at 6.7% simple interest for 5 yr or he can borrow at 6.4% interest compounded continuously for 5 yr.

a. How much total interest would Al pay at 6.7% simple interest?

b. How much total interest would Al pay at 6.4% interest compounded continuously?

c.  Which option results in less total interest?

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Step 1

a.

Find the simple interest paid by Al at 6.7% interest.

Step 2
Step 3

We have P = \$15,000, r = 6.7%, t = 5 yrs.

Substituting the ...

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