1. Loan Interest. (6 points)

Sharon is considering the purchase of a car for $20,500. She will make a down payment of $5,000 and finance the rest. Sharon is offered two maturities. On a four-year loan, Sharon will pay $371.17 per month. On a five-year loan, Sharons monthly payments will be $306.99.

1. How much interest will Sharon pay over the life of the loan on the four-year loan? (2 points)
2. How much interest will Sharon pay over the life of the loan on the five-year loan? (2 points)
3. Comparing the interest in a four-year loan with the interest in a five-year loan, how much interest would Sharon save if she selects the four-year loan? (2 points)