Suppose you apply for a 10-year loan in the amount of $18,000 with an APR of 4%, compounded monthly. Your monthly payment is $182.24. Determine the total amount of interest paid over the term of the loan.



 $3918.80


 $3868.80


 $3985.80


 $3668.80


 None of the above.

To determine the total amount of interest paid over the term of the loan, we follow these steps:

### Step 1: Calculate the total amount paid over the loan term.
The loan is paid monthly for 10 years, and there are 12 months in a year. So, the total number of payments is:
\[
10 \text{ years} \times 12 \text{ months/year} = 120 \text{ payments}
\]
The monthly payment is $182.24, so the total amount paid over the 10 years is:
\[
182.24 \times 120 = 21,868.80
\]

### Step 2: Subtract the principal (loan amount) from the total amount paid.
The loan principal is $18,000. The total interest paid is the difference between the total amount paid and the loan principal:
\[
21,868.80 - 18,000 = 3,868.80
\]

### Conclusion:
The total interest paid is $3,868.80.

Thus, the correct answer is:
\[
\boxed{3868.80}
\]

Let me know if you'd like further details on how the calculation works, or if you have any other questions!

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Here are 5 related questions:
1. What is the formula for calculating the monthly payment of a loan?
2. How does compounding frequency affect the total interest paid on a loan?
3. What is the difference between APR and nominal interest rate?
4. How would the total interest change if the loan term were 5 years instead of 10?
5. How does increasing the monthly payment impact the loan term and total interest?

**Tip:** Making extra payments towards the principal of a loan can significantly reduce the total interest you pay over time.

Suppose you apply for a 10-year loan in the amount of $18,000 with an APR of 4%, compounded monthly. Your monthly payment is $182.24. Determine the total amount of interest paid over the term of the loan.

Learn how to calculate the total interest paid over the term of a 10-year loan of $18,000 with an APR of 4%, compounded monthly. This problem covers loan amortization concepts and interest calculations, suitable for high school students in Grades 10-12.

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