Suppose you apply for a 9-year loan in the amount of $23,000 with an APR of 7%, compounded monthly. Your monthly payment is $287.64. Determine the total amount of interest paid over the term of the loan.



 $8065.12


 $7935.12


 $8075.12


 $7665.12


 None of the above.


To determine the total amount of interest paid over the term of the loan, we need to calculate the total amount paid and subtract the original loan amount.

### Given Information:
- Loan amount (Principal) = $23,000
- Annual Percentage Rate (APR) = 7%
- Loan term = 9 years
- Monthly payment = $287.64
- Number of compounding periods per year = 12 (monthly)

### Steps:

1. **Total number of payments**:
   The total number of payments is the number of months in 9 years.
   \[
   \text{Total payments} = 9 \times 12 = 108 \text{ months}
   \]

2. **Total amount paid over the term**:
   Multiply the monthly payment by the total number of payments:
   \[
   \text{Total amount paid} = 287.64 \times 108 = 31,073.12
   \]

3. **Total interest paid**:
   Subtract the loan amount from the total amount paid:
   \[
   \text{Total interest paid} = 31,073.12 - 23,000 = 8,073.12
   \]

### Conclusion:
The total interest paid over the term of the loan is **$8,073.12**. Since this value is not listed as an option, the correct answer is:

**None of the above**.

Would you like more details on the calculations or have any further questions?

Here are 5 related questions:
1. How does the APR affect the monthly payments on a loan?
2. What is the difference between simple interest and compound interest?
3. How can you calculate the monthly payment for a loan using the amortization formula?
4. What happens if you make extra payments on a loan each month?
5. How do loan terms (number of years) impact the total interest paid?

**Tip:** Longer loan terms may lower monthly payments, but increase the total interest paid over time.

Suppose you apply for a 9-year loan in the amount of $23,000 with an APR of 7%, compounded monthly. Your monthly payment is $287.64. Determine the total amount of interest paid over the term of the loan.

Learn how to calculate the total interest paid on a 9-year loan of $23,000 with an APR of 7%. This step-by-step solution demonstrates how to determine total payments and interest using loan amortization and compound interest concepts. Suitable for high school students in Grades 10-12.

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