When comparing two installment loans with the same principal and annual percentage rate (APR),the loan with ____________.
A)the longer maturity will have the lower monthly payment and the higher total costs
B)the shorter maturity will have the lower monthly payment and the higher total costs
C)the longer maturity will have the higher monthly payment and the higher total costs
D)the shorter maturity will have the lower monthly payment and the lower total costs

Question

When comparing two installment loans with the same principal and annual percentage rate (APR),the loan with ____________. ​
A)the longer maturity will have the lower monthly payment and the higher total costs
B)the shorter maturity will have the lower monthly payment and the higher total costs
C)the longer maturity will have the higher monthly payment and the higher total costs
D)the shorter maturity will have the lower monthly payment and the lower total costs

Quizplus · Accepted Answer

A longer maturity spreads the payments over more periods, reducing monthly payments but increasing total interest paid, leading to higher total costs.

When Comparing Two Installment Loans with the Same Principal and Annual