M4D1: Consolidating Student Loans

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

You have the opportunity to consolidate these two 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. What will your total payments be over the life of the loan?

How much of this total payment is interest?

3. What are the pros and cons of doing this consolidation?

Please clearly show each step of your solution.

Thank you.