Mrs$.$ C needs to borrow $$16,000$ for $3$ years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates is best for Mrs$.$ C$?$

$8\mathrm{.}5$ percent interest, compounded annually

You Answered

$8$ percent interest, compounded annually

Correct Answer

$8\mathrm{.}5$ percent simple interest

$9$ percent interest, compounded annually

$7\mathrm{.}9$ percent compounded monthly