The bank would earn a profit of over years if a customer was charged 15% interest.
A consumer would save over the life of the loan with a 5% interest rate rather than a 10% interest rate.

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esdrashernandez esdrashernandez · Answer 1 · 2019-03-22T17:30:13+01:00

The bank would earn a profit of $4,274 over Five years if a customer was charged 15% interest.

A consumer would save $1,428 over the life of the loan with a 5% interest rate rather than a 10% interest rate.

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Parrain Parrain · Answer 2 · 2022-01-03T13:39:18+01:00

The amount the bank would earn as profit over 5 years would be $4,274 and the amount the consumer would save is $1,428.

The loan amount is $10,000. If the consumer borrowed at 15%, the total they would be is $14,274. Profit for the bank is therefore:

= Amount paid - Loan amount

= $14,274 - 10,000

= $4,274

If the customer took a loan at 5% instead of 10%, the amount saved would be:

= Amount paid at 10% - Amount at 5%

= 12,750 - 11,322

= $1,428

In conclusion, the bank would make $4,274 and the customer would save $1,428.

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