Unless the outstanding loan balance is compounding, it will always be best to defer the payment to a later date. That way, you can hang on to the money and allow it to compound, making money for you, before you have to give it up to someone else.
The continuous compounding formula is:
FV = Pe^(Yr)
So, for part a we have: P=5000, Y=5, r=.025... plug it in and get FV=5665.74. This means that you could earn 665.74 over 5 years if you decided to keep the money and pay later, instead of paying now.