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Which statement is true?    If all other variables are the same, a 3 year loan...

Which statement is true?

  

If all other variables are the same, a 3 year loan costs more than a five year loan.

   

Financing a car will cost less overall than paying for it all in one payment.

   

If all other variables are the same, money compounded semiannually always earns more than compounded continuously.

   

Annual percentage yield is always a smaller number than the annual percentage rate it's based on.

   

If all other variables are the same, money compounded quarterly always earns more than compounded monthly.

   

If all other variables are the same, when financing future values, a lower interest rate will reduce your payment amount.

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Answer #1

When all the other variable are same, and we are financing the future values then a lower interest rate will be reducing the payment amount and a higher interest rate will increasing the payment amount because it can always be seen through financing a loan that a lower interest rate is desired because that will be lowering the overall payment amount in the future.

All the other options are false about compounding and annual percentage yield.

Correct answer will be option (F)if all variable are the same, when financing future values lower interest rate, will reduce the payment amount.

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