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Jackson took out a 6-year loan for $77,000 at an APR of 10.3%, compounded monthly, while Leo took out a 6-year loan for $82,000 at an APR of 10.3%, compounded monthly. Who would save more by paying off his loan 10 years early?
A) Jackson would save more, because he borrowed $5000 more in principal.
B) Jackson would save more, because he borrowed $5000 less in principal.
C) Leo would save more, because he borrowed $5000 less in principal.
D) Leo would save more, because he borrowed $5000 more in principal.

Respuesta :

jepessoa

Answer:

D) Leo would save more, because he borrowed $5000 more in principal.

Explanation:

I guess the question should say who would save more by paying 1 year earlier, since they are 6-year loans, the concept remains the same.

Leo borrowed $82,000, while Jackson borrowed $77,000. That means that Leo borrowed $5,000  more.

The more you borrow, the higher the interest payment. If both loans have the same APR 10.3% compounded monthly, then the only difference results from the principal amount. Since Leo pays more interest, if he decides to pay the loan earlier, he will save more money.

2022jakegarcia

Answer:

Leo would save more, because he borrowed $5000 more in principal.

Explanation:

A.P.E.X

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