quiz\nquestion 6 of 8\naisha needs a loan to finance her latest startup. she wants a loan with the lowest…

quiz\nquestion 6 of 8\naisha needs a loan to finance her latest startup. she wants a loan with the lowest overall interest costs. she’s considering a 3 - year loan with an 8% fixed interest rate or a 5 - year loan with a 6% fixed interest rate. why would aisha pick the 3 - year loan?\nselect a response.\nit has a lower total cost.\nit has a smaller monthly payment.\nit has a lower interest rate.\nit has a higher loan amount.

quiz\nquestion 6 of 8\naisha needs a loan to finance her latest startup. she wants a loan with the lowest overall interest costs. she’s considering a 3 - year loan with an 8% fixed interest rate or a 5 - year loan with a 6% fixed interest rate. why would aisha pick the 3 - year loan?\nselect a response.\nit has a lower total cost.\nit has a smaller monthly payment.\nit has a lower interest rate.\nit has a higher loan amount.

Answer

Explanation:

Step1: Analyze the goal

Aisha wants lowest overall interest costs.

Step2: Evaluate each option

  • 3 - year loan at 8%: Shorter - term, higher rate but lower total interest due to shorter time.
  • 5 - year loan at 6%: Longer - term, lower rate but higher total interest due to longer time.
  • Total cost includes principal and interest. Shorter - term loan usually has lower total cost.
  • Monthly payment of 3 - year loan is likely higher due to shorter repayment period. Interest rate of 3 - year loan is higher. Loan amount is not mentioned as a factor.

Answer:

It has a lower total cost.