Question

Two friends each had an auto loan of $20,000. One was repaid at

8% in 3 years at about $625 per month, and the other at 8% in 5
Years at about $405 per month. The total of the payments for the 5-year loan is how much more than the total for the 3-year loan?

Answer 1

1,800 more

Explanation:

12 × 3 = 36 months

$625 × 36 = $22,500

12 × 5 = 60 months

$405 × 60 = $24,300

$24,300 - $22,500 = $1,800

the interest is paid per month, so we first need to convert the years to months. after that we calculate the total amount of money paid over the specified years. and then we subtract the one from the other to get the difference.