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

quiz\nquestion 6 of 8\nalsha 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 alisha 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\nalsha 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 alisha 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

Brief Explanations:

Alisha wants the loan with the lowest overall interest costs. The 3 - year loan has a shorter term and although the interest rate is higher (8% vs 6% for the 5 - year loan), over a shorter period, the total amount of interest paid will be lower, resulting in a lower total cost. Monthly payments are not the focus as her goal is overall interest cost, the interest rate is higher for the 3 - year loan, and there's no indication of loan amount differences.

Answer:

It has a lower total cost.