I need help with understanding the calculatin breakdown for the problem below - Pete needs $8000 in student loans to finish out the year. He is comparing two different loans. The current interest rate is 6% for a 5 year loan 4% for a 10 year loan. Loan A (5 years) results in monthly payments of $154.66 and a total payback value of $9,279.60. Loan B (10 years) results in monthly payments of $81.00 and a total payback value of $9,720. Which loan requires more interest to be paid and by how much?
I need help with understanding the calculatin breakdown for the problem below - Pete needs $8000 in student loans to finish out the year. He is comparing two different loans. The current interest rate is 6% for a 5 year loan 4% for a 10 year loan. Loan A (5 years) results in monthly payments of $154.66 and a total payback value of $9,279.60. Loan B (10 years) results in monthly payments of $81.00 and a total payback value of $9,720. Which loan requires more interest to be paid and by how much?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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I need help with understanding the calculatin breakdown for the problem below -
Pete needs $8000 in student loans to finish out the year. He is comparing two different loans. The current interest rate is 6% for a 5 year loan 4% for a 10 year loan.
Loan A (5 years) results in monthly payments of $154.66 and a total payback value of $9,279.60.
Loan B (10 years) results in monthly payments of $81.00 and a total payback value of $9,720.
Which loan requires more interest to be paid and by how much?
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