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Maria and John decide to shop for furnishing for their new house.

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Maria and John decide to shop for furnishing for their new house.
They choose items that amount to $3600. The store has 2 fixed installment loan options for purchasing:

Option 1: 20% down payment and financing at 6% simple interest per year for 3 years

Option 2: no down payment and financing at 6.35% simple interest for 4 years.

Question: A) Which option will result in the smaller monthly payment? What will that monthly payment charge be?

B) They decide to defer any purchase and invest a $3600 Bonus that Maria will be getting from in a savings account. The interest rate is 1.6% compounded every month. How much interest will they earn in 3 years?

C) They decide to defer any purchases and loan the $3600 to a relative at 2.5% simple interest per year. How long will the term of the loan need to be if they want to earn $400 in interest?

 
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