Difficulty with this word problem

timer Asked: Feb 22nd, 2015

Question description

   Comparing Loan Sources.  Tom Angelo needs to borrow $1500 to expand his farm implement maintenance business.  He learns that the local bank will lend him the money for two years at a rate of 10% compounded quarterly.  After hearing this rate, Tom's grandfather offers to lend him the money for 2 years with a simple interest rate of 7%.  How much money will Tom save by borrowing the money from his grandfather?

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