how much money will a borrower using loan 2 pay in interest over the life of the loan?\n| |loan 1|loan…

how much money will a borrower using loan 2 pay in interest over the life of the loan?\n| |loan 1|loan 2|\n|--|--|--|\n|principal|$4000.00|$4000.00|\n|monthly payment|$175.00|$120.00|\n|duration|24 months|36 months|

how much money will a borrower using loan 2 pay in interest over the life of the loan?\n| |loan 1|loan 2|\n|--|--|--|\n|principal|$4000.00|$4000.00|\n|monthly payment|$175.00|$120.00|\n|duration|24 months|36 months|

Answer

Explanation:

Step1: Calculate total payments

The total amount paid over the life of Loan 2 is the monthly - payment times the number of months. The monthly payment of Loan 2 is $120 and the duration is 36 months. So the total amount paid is $120\times36$. $120\times36 = 4320$

Step2: Calculate interest paid

The interest paid is the total amount paid minus the principal amount. The principal of Loan 2 is $4000. $4320 - 4000=320$

Answer:

$320$