Question

Loan Interest. Sharon is considering the purchase of a car. After making the down payment, she will finance $21.530. Sharon is offered three maturities on four-year loan, Sharon will pay $515.56 per month. On a five-year loan, Sharon's monthly payments will be $426.32. On a six-year loan, they will be $367 0 Sharon rejects the four-year loan, as it is not within her budget. So, Sharon would pay $4,049.20 in interest over the life of the five-year loan. On the six year loan Sharon would pay $4,899.04 in interest. If Sharon had been able to afford the four-year loan, how much interest would she have saved compared to the five year loan The interest Sharon would have paid on the four-year loan is $ (Round to the nearest cent)

Answer 1

solution - Four-year Loan Monthly payments =$515.56 Repayment periods = nxm => 4x12=48 - Where na Number of years . ma payment periods in a year. Loan =$21,530 Total. Interest - Total payments - Loan. =(5515,56 % +18) - $21,530 = $24746.88 -$21.530 =$3216.88

conclusion . If Sharon had been able to afford the four- year loan, the interest she would have saved. compared to five-year loan is =$hona.20 - $3,216.88. =$832.32
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