A small business refits its store.The builders charge them $125,000,which will be paid back in monthly installments over three years at 6% APR.The builders will reduce this rate to 5.5% APR if they pay $2500 up front.By approximately how much will this reduce the monthly loan repayments?
A)$104
B)$28
C)$214
D)$77
E)$192

Question

Quizplus · Accepted Answer

The reduction in APR from 6% to 5.5% will decrease the monthly payment. Calculating the difference in monthly payments for both interest rates over 36 months shows a reduction of approximately $104.

A Small Business Refits Its Store