Question

Which loan has the lowest total repayment?

Answer 1

Answer:   Loan B

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Explanation:

Refer back to this related question

https://brainly.com/question/27362373

In that link I detail how to find that

• Loan A has a monthly payment of $348.50
• Loan B has a monthly payment of $518.02

Loan A has a duration of 5 years, aka 5*12 = 60 months. Over those 60 months, you'll pay back a total of 60*348.50 = 20,910 dollars for loan A.

Loan B has a shorter duration of 3 years = 3*12 = 36 months. Therefore, you'll pay back 36*518.02 = 18,648.72 dollars in total for loan B.

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Summary total repayment

• Loan A = 20,910 dollars
• Loan B = 18,648.72 dollars

We have loan B as the winner in terms of the lowest total repayment. The longer a loan is, the higher chances are that you'll pay back more in interest (thereby making the total repayment larger).

Answer 2

Answer :  

• Loan B

Explanation :

• Loan A's monthly payment → $348.50

• Loan B's monthly payment → $518.02

Cost of Loan A repayment

• Duration = 5 years = 5 x 12 = 60 months
• Cost = 60 x 348.50 = $20,910

Cost of Loan B repayment

Loan B has a shorter duration of 3 years = 3*12 = 36 months. Therefore, you'll pay back 36*518.02 = 18,648.72 dollars in total for loan B.

• Duration = 3 years = 3 x 12 = 36 months
• Cost = 36 x 518.02 = $18,648.72

Clearly, Loan B has the lowest total repayment.