To determine how much interest a borrower will pay on Loan 1 over the life of the loan, we'll need to follow a step-by-step approach.
### Step-by-Step Solution:
1. Identify the principal amount for Loan 1:
Principal amount is \[tex]$4600.00.
2. Identify the monthly payment for Loan 1:
Monthly payment is \$[/tex]138.00.
3. Identify the duration of Loan 1:
Duration is 36 months.
4. Calculate the total amount paid by the borrower over the life of the loan:
To find the total amount paid, multiply the monthly payment by the number of payments (duration):
[tex]\[
\text{Total Payment} = \text{Monthly Payment} \times \text{Duration}
\][/tex]
Plugging in the numbers:
[tex]\[
\text{Total Payment} = 138.00 \times 36 = \$4968.00
\][/tex]
5. Calculate the interest paid on Loan 1:
Interest paid is the total amount paid minus the principal amount:
[tex]\[
\text{Interest Paid} = \text{Total Payment} - \text{Principal}
\][/tex]
Plugging in the numbers:
[tex]\[
\text{Interest Paid} = 4968.00 - 4600.00 = \$368.00
\][/tex]
Therefore, the borrower will pay \$368.00 in interest over the life of Loan 1.
