Georgia Assessments for the Certification of Educators GACE Practice Test

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Which of the four options listed in the table would require the family to pay the least amount of interest, total?

Option A
Option B
Option C
Option D

The correct answer is: Option C

In order to determine the answer, it is important to consider the concept of interest. Interest is a fee charged by a lender to a borrower for the use of money. In this scenario, we are determining which option would result in the least amount of interest for the family. Option A This option could potentially result in a high interest rate as it may be a longer-term loan, resulting in more time to accumulate interest. Option B: This option may have a lower interest rate, but it is important to also consider any fees or penalties that may be associated with early repayment. These additional costs could outweigh the lower interest rate. Option C: This is the correct answer. By choosing this option, the family would have to pay the least amount of interest due to a shorter loan term and potentially lower interest rate. Option D: This option may have a lower interest rate, but it also requires a larger initial payment. This means that the family may end up paying more interest in the long run as they have already paid a significant amount upfront. In summary, Option C would result in the least amount of interest for the family due to a combination of a shorter loan term and potentially lower interest rate.