Respuesta :
For the loan amount based on credit rating, Ethel pay $1681 more than the Jack. The option C is the correct option.
What is compound interest?
Compound interest is the amount charged on the principal amount and the accumulated interest with a fixed rate of interest for a time period.
The formula for the final amount with the compound interest formula can be given as,
[tex]A=P\times\left(1+\dfrac{r}{n\times100}\right)^{nt}\\[/tex]
Here, A is the final amount (principal plus interest amount) on the principal amount P of with the rate r of in the time period of t.
Here, total time period is six years.
As the loan amount is of $7,725 and the APR of Ethel loan is 9. 14%, compounded monthly.
[tex]A=7725\times\left(1+\dfrac{9.14}{1200}\right)^{72}\\A=13340.2278[/tex]
The APR of Jack’s loan is 6. 88, compounded monthly.
[tex]A=7725\times\left(1+\dfrac{6.88}{1200}\right)^{72}\\A=11659.05[/tex]
The difference between both final amount is,
[tex]A=13340.2278-11659.0500\\A\cong1681[/tex]
Hence, For the loan amount based on credit rating, Ethel pay $1681 more than the Jack. The option C is the correct option.
Learn more about the compound interest here;
https://brainly.com/question/24274034
