One bank offers a 4% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. Assuming no other differences between the loans, a customer should choose the fixed rate loan because

A) the interest rate is higher and guaranteed to increase

B) the interest rate is higher but will not increase

C) the interest rate is lower and will not increase

D) the interest rate is lower but is likely to increase

Question

15 May, 03:59

+2

Answers (2)

Know the Answer?

Kaitlyn Sherman · Answer 1

With a variable interest rate will move up and down, but a fixed rate will stay.

D. the interest rate is lower but is likely to increase.

Hayley Holmes · Answer 2

I believe the answer is A