Answer:
FALSE
Explanation:
Loans consist of a principal amount, called the amount, plus an interest rate that will be applied over the number of periods the loan will be repaid. For example, an amount of $ 1000 may be borrowed at a rate of 1% for a period of days, months or years, depending on the agreement between the parties. If one loan is over $ 1000 over the other, that does not mean that the cost of that loan will be $ 1000 higher. The cost of the loan will depend on the rate and the period. Even if the period and rate are the same, the cost will not be the same.
For example, imagine two loans of $ 1000 and $ 2000 respectively. Imagine that the loan is valid for 1 month at a rate of 1%.
Amount = $ 1000 and $ 2000
interest rate = 0.05
Period = 1 month
The final amount will be: amount * interest rate * period
1) $ 1000 * 0.05 * 1 = $ 1050
2) $ 2000 * 0.05 * 1 = $2010
The total cost of the loan will be the final amount less the amount of the loan.
Therefore, the total cost of the first loan was $ 50 and the total cost of the second loan was $ 100.
