Final answer:
Esteban will pay $221.28 more in interest by choosing the 5-year loan instead of the 3-year loan, after calculating the total payments and subtracting the original loan amount for each option.
Step-by-step explanation:
To determine the additional interest Esteban will pay if he chooses the 5-year loan instead of the 3-year loan, first calculate the total payments for each term and then compare the interest paid.
3-Year Loan Calculation
Total payments over 3 years: 36 months × $148.07/month = $5,330.52
Total interest paid over 3 years: $5,330.52 - $5,000 = $330.52.
5-Year Loan Calculation
Total payments over 5 years: 60 months × $92.53/month = $5,551.80
Total interest paid over 5 years: $5,551.80 - $5,000 = $551.80.
Difference in interest paid: $551.80 - $330.52 = $221.28.
Esteban will pay $221.28 more in interest if he chooses the 5-year loan over the 3-year loan.