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A person needs to borrow $500. They are comparing two short-term loan options. Option A is a loan for 15 days with a $40 finance charge. Option B is a loan for 30 days with a $70 finance charge. The person concludes that Option A is the more cost-effective choice because its finance charge ($40) is lower than Option B's ($70). What is the primary flaw in this reasoning?
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- Loan A: A 10-day loan with a $40 finance charge.
- Loan B: A 30-day loan with a $60 finance charge.
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Evaluating Short-Term Loan Options
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