Question

Karen took out a $9,000 personal loan to purchase a car. The loan has a 4-year term and a 5% interest rate. If Karen’s monthly payments are $207.26, what is the amount of interest she will have to pay on her loan?

Answer 1

Karen will have to pay $9,450 back to the bank. If Karen gives monthly payments of $207.26, she will be able to pay off her loan in around 3.6 years.

Explanation:

5% of 9,000 is 450

9,000+450=9,450

Karen will have to pay $9,450 back to the bank where there is a 5% interest rate.