Steven graduated from college with $22,500 in student loans and is looking to refinance. The current interest rate is 5% and he is debating between a 10 year loan or a 20 year loan. Loan A (10 years) results in monthly payments of $238.65. Loan B (20 years) results in monthly payments of $148.49. What would be his total payback amount for each loan?

Question

Mathematics

Finley Duffy

5 March, 15:04

Steven graduated from college with $22,500 in student loans and is looking to refinance. The current interest rate is 5% and he is debating between a 10 year loan or a 20 year loan. Loan A (10 years) results in monthly payments of $238.65. Loan B (20 years) results in monthly payments of $148.49. What would be his total payback amount for each loan?

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Gabrielle Simon · Answer 1

For Loan A, his total payback amount would be $28,638. In turn, for Loan B his total payback amount would be $35,637.60.

Step-by-step explanation:

For the 10-year Loan A, with monthly payments of $ 238.65, the total value of the payback is determined by calculating the monthly amount for the number of months that are 10 years old, that is: 238.65 x 10 x 12, the result of which is $ 28,638.

On the other hand, for the 20-year Loan B, with monthly payments of $ 148.49, the total value of the payback is determined by calculating the monthly amount for the number of months that are 20 years old, that is: 148.49 x 20 x 12, the result of which is $ 35,637.60.