Question

You are offered the following terms on a loan of $2250: 9.25 % interest per year paid back over 36 months. If monthly payments are $79.84, how much interest will you have paid once this loan is paid in full?

a) $624.24
b) $655.24
c) $2874.24
d) $1242.50
e) None of the above

Answer 1

Answer: $624.24.

Step-by-step explanation:

To find the total amount of interest paid on the loan, we first need to find the total amount of money repaid over the course of 36 months.

The total amount repaid is the monthly payment multiplied by the number of months:

Total amount repaid = Monthly payment x Number of months

Total amount repaid = $79.84 x 36 = $2,874.24

To find the total amount of interest paid, we need to subtract the original amount borrowed from the total amount repaid:

Total interest paid = Total amount repaid - Original amount borrowed

Total interest paid = $2,874.24 - $2,250 = $624.24

Therefore, the total amount of interest paid on the loan is $624.24.