Jaime needs to buy a new refrigerator for his apartment. He found what he needed for $1,300 at a well-known appliance store. The store is offering two options for Jaime to finance the appliance: Option I: A store credit card with a $1,500 limit:

1) The credit card charges 16.5% annual interest rate.

2) The minimum monthly payment is $100 plus the monthly finance charge.

3) No down payment required

4) The loan is expected to be paid off in12 months to avoid additional penalties.

Option II: The appliance store offers an installment loan for his purchase:

1) Loan charges a simple interest rate of 12.5%.

2) Loan must be paid off in 12 equal payments to avoid penalties.

3) A $300 down payment is required.