Loan Interest. Sharon is considering the purchase of a car. After making the down payment, she...

Loan Interest. Sharon is considering the purchase of a car. After making the down payment, she will finance $10,050. Sharon is offered these three maturities. On a four year loan, sharon will pay $240.66 per month, on a five-year loan, Sharons monthly payments will be $199.00. On a six-year loan, they will be $171.34. Sharon rejects the four year loan, as it is not within her budget. So, Sharon would pay $1,890.00 in interest over the life of the five year loan. On the six year loan, sharon would pay $2,286.48 in interest. If sharon had been able to afford the four year loan, how much interest would she have saved compared to the five year loan?

The interest sharon would have paid on the four year loan is ?

if Sharom had not been able to afforf the four year loan, the amount of interest she would have saved compared to the five year loan is?

Expert Solution

Loan Amount	No of Years	No of Payments	EMI	Total Payments	Interest	Interest Saved compared to the five year loan
10,050.00	4.00	48.00	240.66	11,551.68	1,501.68	=1890-1501.68 = 388.32
10,050.00	5.00	60.00	199.00	11,940	1,890.00
10,050.00	6.00	72.00	171.34	12,336.48	2,286.48

jeff jeffy answered 1 year ago

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