Question
Sharon is considering the purchase of a car. After making the down payment, she will finance $18,610. Sharon is offered three maturities. On a four-year
Sharon is considering the purchase of a car. After making the down payment, she will finance $18,610. Sharon is offered three maturities. On a four-year loan, Sharon will pay $437.06 per month. On a five-year loan, Sharon's monthly payments will be $359.78. On a six-year loan, they will be $308.42. Sharon rejects the four-year loan, as it is not within her budget. So, Sharon would pay $2,976.80 in interest over the life of the five-year loan. On the six-year loan, Sharon would pay $3,596.24 in interest. If Sharon had been able to afford the four-year loan, how much interest would she have saved compared to the five-year loan?
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