Question

when you borrow money, what is the main hidden enemy that can significantly increase your repayment costs?
b) short loan terms
prepayment penalties
compound interest

Explanation:

Short loan terms typically lead to higher monthly payments but not increased total repayment costs compared to longer terms. Prepayment penalties are only incurred if the loan is paid off early, so they are not a universal hidden cost for all borrowers. Compound interest, however, accrues on both the principal amount and any accumulated interest, meaning over time the total amount owed grows exponentially, significantly increasing overall repayment costs for borrowers who carry a balance over time.

Answer:

Compound interest