Question

question 2 of 8
margo wants to purchase a new car. she doesn’t have enough in savings to cover the cost. she decides to look into loans from her bank. how can taking out a loan help margo with her car purchase?
select a response.

• it can help by reducing her total amount of debt
• it can help by not requiring any immediate down payment
• it can help by spreading out the expense over time
• it can help by having no impact to her credit score

Explanation:

• The first option is incorrect because taking out a loan adds debt, it does not reduce it.
• The second option is incorrect because most car loans require a down payment.
• The third option is correct because a loan allows Margo to pay the car cost in smaller installments over an extended period, making the large upfront cost manageable.
• The fourth option is incorrect because taking out a loan will impact her credit score (positively if payments are on time, negatively if not).

Answer:

C. It can help by spreading out the expense over time