Answer-
If he had paid the loan in 7 years instead of 10 years, he could have saved $2437.50
Solution-
As we are not provided with the compounding rate, so considering as simple interest with 3.25% annual interest rate.
we know,
[tex]i=\dfrac{P\times R\times t}{100}[/tex]
For 10 years,
[tex]i_1=\dfrac{25000\times 3.25\times 10}{100}=8125[/tex]
For 7 years,
[tex]i_2=\dfrac{25000\times 3.25\times 7}{100}=5687.50[/tex]
The extra interest paid by him is,
[tex]=8125-5687.50=2437.5[/tex]
Therefore, if he had paid the loan in 7 years instead of 10 years, he could have saved $2437.50
