Answer to Activity 4

The monthly payments over four years ($155.82) looks good in contrast to those is two ($266.99), don't they? But look at the totals:

Two years: 24*266.99=   $6407.76

Four years: 48*155.82=  $7479.36

Subtract the large amount from the smaller amount: $1,071.60

Those smaller monthly payments would cost more than a thousand dollars at the end! That is the difference in interest paid for four years instead of two years. Pay off your loans as soon as possible!!!

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