Question

Jonah takes out an $18,000 personal loan to make home repairs. His interest rate is 9.1% on an 8-year loan. His monthly payments are $264.64. What is the total payback amount and how much of that is interest?

Answer 1

The first step is to calculate the total number of months in the 8-year loan term:

8 years * 12 months/year = 96 months

Next, we can use the monthly payment amount to calculate the total payback amount:

Total payback amount = Monthly payment * Total number of months

Total payback amount = $264.64 * 96

Total payback amount = $25,455.04

So the total payback amount for the loan is $25,455.04.

To calculate the total interest paid over the life of the loan, we can use the formula:

Total interest = Total payback amount - Loan amount

The loan amount in this case is $18,000, so:

Total interest = $25,455.04 - $18,000

Total interest = $7,455.04

So the total interest paid over the life of the loan is $7,455.04.

Explanation: