annalovessyuhh
Answered

Xavier Martinez took out a $5,000 loan at 7.5% interest for reconstructing his patio. His monthly payment on the 12-month loan was $437.26. After 6 payments, the balance was $2,556.03. He paid off the loan with the next payment. What did he save by paying off the loan early?

A.) $51.55

B.) $15.98

C.) $67.53

D.) $42.74

Verified Answer :

wolf1728

Paying off the entire loan = 12 437.26 =



5,247.12




He paid 6 437.26 =



2,623.56




He then paid 2,556.03

2,623.56

plus = 2,556.03 =



5,179.59





5,247.12


minus 5,179.59 =
67.53 the amount of money he saved.

Answer:  C. $67.53                

Step-by-step explanation:

Here the total amount of the loan = $ 5000

Interest rate = 7.5%

His monthly payment = $437.26

Since, if he pay off the loan in 12 months,

Then his total payment = @@MATH_TOKEN_0@@

And, if he pay off the loan in 7 month,

In which his total payment in 6 months =@@MATH_TOKEN_1@@

His payment in 7 month = $2556.03

Thus, the total payment he did =2623.56 + 2556.03 = $5179.59

Thus, his total saving = 5247.12 - 5179 = $67.53

Therefore, Option C is correct.

Related Questions