Question

Olivia and Garrett each take out at $18,000 loan for a new car. Each how to repay the loan in 5 years. Olivia has interest rate 3.2% per year . Her monthly payment is $308 Because Garrett has a lower credit score he will pay an interest rate of 3.6% per year. His monthly payment will be $311. How much more will an $18,000 loan cost Garrett than Olivia.

Answer 1

Answer:

$180

Step-by-step explanation:

First, you have to calculate the amount that Olivia would have paid at the end of the loan which would be the result of multiplying her monthly payment for the number of payments:

Total payment= $308*(12*5)

Total payment= $308*60

Total payment= $18,480

Then, you have to calculate the amount that Garrett would have paid at the end of the loan:

Total payment= $311*(12*5)

Total payment= $311*60

Total payment= $18,660

Now, you have to calculate the difference in the amount Olivia and Garrett would have paid:

$18,660-$18,480= $180

According to this, an $18,000 loan will cost Garrett $180 more than Olivia.