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22 votes
You take out a loan for $7,500 and plan to pay it back over 4 years. Your credit score is 750. How much will you save by having a credit score that is higher than 700?

You take out a loan for $7,500 and plan to pay it back over 4 years. Your credit score-example-1
User Tim Delaney
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1 Answer

9 votes
9 votes

Answer:

Explanation:

The difference between a credit score of 699 and 700 is 14.125% and 13.125% APR interest rate for a 4-year (48-months) loan of $7500.

With APR of 14.125% compounded yearly, the total loan payment after 4 years is

= $7500 * (1 + 14.125%)^4

= $7500 * 1.14125^4

= $12722.85

With APR of 13.125% compounded yearly, the total loan payment after 4 years is

= $7500 * (1 + 13.125)^4

= $7500 * 1.13125^4

= $12282.75

So you will save by having a credit score above 700:

= $12722.85 - $12282.75

= $440.10

Please note that posting the same question multiple times does not usually help in getting an answer :)

User George Hernando
by
3.1k points
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