Question

how much money will a borrower using loan 2 pay in interest over the life of the loan?
principal loan 1 $3000.00 loan 2 $3000.00
monthly payment $70.00 $90.00
duration 48 months 36 months

Explanation:

Step1: Calculate total payment for Loan 2

To find the total amount paid over the life of Loan 2, we multiply the monthly payment by the duration (in months). The monthly payment for Loan 2 is $90.00 and the duration is 36 months. So the total payment is $90.00 \times 36$.
$$90\times36 = 3240$$

Step2: Calculate interest paid

The interest paid is the total amount paid minus the principal. The principal for Loan 2 is $3000.00. So we subtract the principal from the total payment we calculated in Step 1.
$$3240 - 3000 = 240$$

Answer:

240