Clarissa needs a $2,500 loan in order to buy a car. Which loan option would allow her to pay the least amount of interest? A) An 18-month loan with a 4.75% annual simple interest rate B) A 30-month loan with a 4.00% annual simple interest rate C) A 24-month loan with a 4.25% annual simple interest rate D) A 36-month loan with a 4.50% annual simple interest rate

Answer:Option A.Step-by-step explanation:Clarissa needs a $2,500 loan in order to buy a car.There are 4 options of loan we will calculate all the options that pay the least amount of interest.To calculate the interest we will use this formula :[tex]\frac{P\times R\times time}{100}[/tex]Where P = Principal amount R = rate of interestT = time in yearsA) Principal 2,500 interest 4.75% and time 18 months (1.5 years)[tex]\frac{2500\times 4.75\times 1.5}{100}[/tex]= $178.125B) Principal 2,500 interest 4% and time 30 months (2.5 years) [tex]\frac{2500\times 4\times 2.5}{100}[/tex]= $250C) Principal 2,500 interest 4.25% and time 24 months (2 years) [tex]\frac{2500\times 4.25\times 2}{100}[/tex]= $212.50D) Principal 2,500 interest 4.50% and time 36 months (3 years)[tex]\frac{2500\times 4.5\times 3}{100}[/tex]= $337.50The least amount of interest would be in option A.