Question

David took out a 12-year loan for $68,000 at an APR of 4.1%, compounded
monthly, while Ralph took out a 12-year loan for $98,000 at an APR of 4.1%,
compounded monthly. Who would save more by paying off his loan 5 years
early?
A.David would save more, since he has $30,000 more in principal
B.David would save more, since he has $30,000 less in principal
C.Ralph would save more, since he has $30,000 more in principal
D.Ralph would save more, since he has $30,000 less in principal ​

Answer 1

Answer:

C.Ralph would save more, since he has $30,000 more in principal

Step-by-step explanation:

The amount of interest each will pay (or save) on his loan is proportional to the amount of principal. Since Ralph's principal of $98000 is more than David's principal of $68000, Ralph will save more by paying off the loan early.