Question

Compare two loans:Loan 1: $175,000; 8% annual (monthly payments); 30 years.Loan 2: $175,000; 7% annual (monthly payments); 15 years.If you pay an additional $250 per month in additional principle on Loan 1 ONLY, which loan pays off sooner

Answer 1

Following are the responses to the given question:

Step-by-step explanation:

For the First loan payment period is value:

`\to NPER((8\%)/(12),-250-PMT((8\%)/(12),12* 30,-175000),175000)=215\ months`

For the second loan payment period is value:

`\to 15* 12=180 \ months`

that's why the loan will be paid off soon.