Answer the following questions.

Suppose you have two student loans:

• $15,000 with an APR of 8% for 15 years
• $10,000 with an APR of 9.5% for 20 years

1. Calculate the monthly payment for each loan individually.
2. How much do you pay each month? How long do you have to pay that monthly amount?
3. Over the course of each loan, how much total do you pay? How much of that is interest? How much interest will you pay in total?

You have the opportunity to consolidate these 2 loans into a single loan with an APR of 8% and a term of 12 years.

1. What will be your monthly payment if you consolidate?
2. How does that payment compare with what you are paying on the two loans individually? Does this result make sense to you? Why or why not?
3. What will your total payments be over the life of the loan? How much of that is interest?
4. What are the pros and cons of doing this consolidation?