1 Thomas wants to buy a used car that costs $4,500. He has already saved $3,300 and will borrow the rest of the money. A credit union will lend Thomas the remaining
money that he needs at a simple interest rate of 3.5%. He must repay the loan within
3 years. Thomas does not want his total loan, with interest, to be more than $1,300,
and he cannot afford a monthly payment over $100. Which of the following explains
the best plan for Thomas to pay off the loan?
A Thomas should pay the loan in 2 years, because the monthly payment would be
$53.50 and the total payoff amount would be $1,284.
B Thomas should pay the loan in 2 years, because the monthly payment would be
$53.50 and the total payoff amount would be $1,242.
C Thomas should pay the loan in 2 years, because the monthly payment would be
$51.75 and the total payoff amount would be $1,242.
D Thomas should pay the loan in 1 year, because the monthly payment would be
$100 and the total payoff amount would be $1,242.