using an online loan calculator determine the difference in the total cost of repaying a 2,500 easy
loan over 3 years at an annual interest rate of 6% compared to an annual interest rate of 8%.
To determine the difference in the total cost of repaying the loan at two different interest rates, we can use an online loan calculator. However, as an AI text-based model, I cannot directly access the internet or provide real-time calculations. I can, however, guide you on how to use an online loan calculator by providing step-by-step instructions.
1. Open your preferred web browser and go to an online loan calculator website. There are several reputable loan calculators available online, such as Bankrate or NerdWallet.
2. Find the loan calculator tool on the website. It is usually located on the homepage or under the "Tools" or "Calculators" section.
3. Enter the loan amount. In this case, input 2,500 as the loan amount.
4. Input the loan term. Since the loan is over 3 years, enter 3 in the loan term field.
5. Enter the annual interest rate. For the first scenario, use an interest rate of 6% and for the second scenario, use an interest rate of 8%.
6. Choose the appropriate compounding frequency. Loans can compound interest annually, semi-annually, quarterly, or monthly. Make sure to select the same compounding frequency for both scenarios. For simplicity, select annual compounding if available.
7. Click on the "Calculate" or "Calculate Loan" button to determine the monthly payment and total cost for each scenario.
8. Compare the total cost of repaying the loan at 6% interest rate to the total cost at 8% interest rate. The difference between the two totals will indicate the variance.
Remember to consider any additional fees or charges that might be associated with the loan, such as origination fees, processing fees, or early repayment penalties, as these can also impact the total cost.
Please note that interest rates and loan terms are subject to change. For accurate and up-to-date calculations, it is recommended to use a reliable online loan calculator or consult with a financial professional.