Question

Cheri took out a loan for $14,350. The loan term was 3 years and Cheri’s payments were $625.77 per month. Since Cheri had filed for bankruptcy several years prior, she ended up paying a higher interest rate. With a better credit rating, her payments could have been $431.21 per month. How much more in interest did Cheri end up paying for her loan because of her bankruptcy?

a.
$5,836.80
b.
$2,334.72
c.
$8,624.16
d.
$7,004.16


The answer is D

Answer 1

Answer: It's D :)

Explanation:

ur welcome

Answer 2

Per month payment of Cheri = $625.77

So, total payments made in 3 years =
`625.77*36=22527.72`

As mentioned, Cheri had filed for bankruptcy several years prior, she ended up paying a higher interest rate. With a better credit rating, her payments could have been $431.21 per month.

So, If she would have paid 431.21 per month for 3 years, in total she would have paid =
`431.21*36=15523.56`

Hence, Cheri paid =
`22527.72-15523.56=7004.16` more

So, Cheri paid option D = $7004.16 more.