Question

100POINTS!!

Suppose you take out a $3,500 personal unsecured loan at 12% APR and are going to pay it back over 8 years. What is the total interest that you will pay on this loan?

Answer 1

$1960.95

$56.88 is paid every month for 8 years

Answer 2

$5165.87

Explanation:

Total loan payment at the end of 8 years is

= $3500 * (1 + 12%)^8

= $3500 * 1.12^8

= $8665.87

Total interest payment is

= Total payment - Principal

= $8665.87 - $3500

= $5165.87