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Arthur took out a 20 year loan for 60,000 at an apr of 4.4% compounded monthly. Approximately how much would he save if he paid it off 3 years early

User Figbeam
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If he paid off 3 years early, he would save amount of $376.36

What is compound interest?

Compound interest is defined as the interest you earn on interest.

For example if you have $100 and it earns 5% interest each year, you'll have $105 at the end of the first year. At the end of the second year, you'll have $110.25.

The amount after a compound interest is expressed as:

A = 60000(1.0022)

A = $ 101570.29

FOR 17 years

A = 60000(1.0026)

A = $101906.65

Therefore the amount saved will be

$101906.65-$101906.65 = $376.36

User Wkordalski
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