Final answer:
The total payback of Loan 2, including both the principal and interest, is $10,789.56, with the interest portion being $789.56 over the life of the loan.
Step-by-step explanation:
To determine the total payback of Loan Number 2, which has an amount borrowed of $10,000, an annual interest rate of 5%, with a term of 3 years and monthly payments, we need to calculate the total of all payments made over the life of the loan. Given the monthly payment is $299.71, we'll simply multiply this by the number of payments over the 3 years:
Total Payback = Monthly Payment × Number of Payments
Total Payback = $299.71 × (12 payments per year × 3 years)
Total Payback = $299.71 × 36
Total Payback = $10,789.56
This total includes both the principal and the interest paid over the life of the loan. To find out just the interest part, you subtract the initial loan amount from this total:
Total Interest Paid = Total Payback - Amount Borrowed
Total Interest Paid = $10,789.56 - $10,000
Total Interest Paid = $789.56
Therefore, for Loan 2, the total payback including the loan and interest is $10,789.56, with the interest amounting to $789.56.