you need to buy a car and are considering loans from two banks. bank 1 offers a loan at 7% interest plus an…

you need to buy a car and are considering loans from two banks. bank 1 offers a loan at 7% interest plus an application fee, and bank 2 offers a loan at 7.5% interest plus an application fee. the loan terms are otherwise identical. based on this information, what can you conclude about which bank offers the better deal?\nchoose the correct answer below.\na. there is no way to tell which deal is better without knowing the amounts of the application fees.\nb. bank 1 offers the better deal because it has a lower interest rate.\nc. both application fees will be small since the banks are competing for your business.\nd. bank 2 probably offers the better deal, since it probably has a lower application fee.

you need to buy a car and are considering loans from two banks. bank 1 offers a loan at 7% interest plus an application fee, and bank 2 offers a loan at 7.5% interest plus an application fee. the loan terms are otherwise identical. based on this information, what can you conclude about which bank offers the better deal?\nchoose the correct answer below.\na. there is no way to tell which deal is better without knowing the amounts of the application fees.\nb. bank 1 offers the better deal because it has a lower interest rate.\nc. both application fees will be small since the banks are competing for your business.\nd. bank 2 probably offers the better deal, since it probably has a lower application fee.

Answer

Brief Explanations:

The total cost of a loan depends on both the interest rate and the application fee. Since only the interest rates are given and the amounts of the application fees are unknown, we can't determine which bank offers a better deal.

Answer:

A. There is no way to tell which deal is better without knowing the amounts of the application fees.