Question

Katie has a loan balance of $5,000 with a 15% APR. She will take 3 years to pay it off, making her monthly payments $201.39. How much is she paying in interest over the 3 years? Question 3 options: $604.17 $2,250 $4,250 $750

Answer 1

$2250

Explanation:

Monthly Payments = 201.39

3 years = 3 * 12 = 36 months

Total she will pay:

201.39 * 36 = $7250.04

Original Loan amount was $5000

She is paying a total of 7250.04

The extra amount (interest) is:

7250 - 5000 = $2250.04

Rounded off, that is $2250