Pete needs $8000 in student loans to finish out the year. He is comparing two different loans. The current interest rate is 6% for a 5 year loan 4% for a 10 year loan. Loan A (5 years) results in monthly payments of $154.66. Loan B (10 years) results in monthly payments of $81.00. What would be his total payback amount for each loan?
The answer is Loan B will have the lowest total payback because the total of the principal and the interest paid for loan B is less than the same total for loan A.
