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How much money will a borrower using Loan 1 pay in interest over the life of the loan?

\begin{tabular}{|l|r|r|}
\hline
& \multicolumn{1}{|c|}{ Loan 1 } & \multicolumn{1}{c|}{ Loan 2 } \\
\hline
Principal & [tex]$\$[/tex] 3500.00[tex]$ & $[/tex]\[tex]$ 3500.00$[/tex] \\
\hline
Monthly Payment & [tex]$\$[/tex] 152.00[tex]$ & $[/tex]\[tex]$ 112.00$[/tex] \\
\hline
Duration & 24 months & 36 months \\
\hline
\end{tabular}

[tex]$\$[/tex][?]$



Answer :

GinnyAnswer
To determine how much money a borrower will pay in interest over the life of Loan 1, follow these steps:

1. Identify the principal amount of the loan.
- For Loan 1, the principal amount is \[tex]$3500.00. 2. Determine the monthly payment amount. - The monthly payment for Loan 1 is \$[/tex]152.00.

3. Identify the duration of the loan in months.
- The duration for Loan 1 is 24 months.

4. Calculate the total amount paid over the life of the loan.
- The total payment over the duration of the loan is calculated by multiplying the monthly payment amount by the number of months.
- Total Payment = Monthly Payment × Duration
- Total Payment = \[tex]$152.00 × 24 - Total Payment = \$[/tex]3648.00

5. Calculate the total interest paid over the life of the loan.
- The total interest paid is determined by subtracting the principal amount from the total payment.
- Interest Paid = Total Payment - Principal
- Interest Paid = \[tex]$3648.00 - \$[/tex]3500.00
- Interest Paid = \[tex]$148.00 Therefore, the borrower will pay \$[/tex]148.00 in interest over the life of Loan 1.

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