The longer a loan schedule lasts, the more interest you will pay. To illustrate a $20,000-car-loan at 9% APR (compounded monthly) for three years (36 monthly payments) will incur total interest of $2,896. But a $20,000 car loan at 9% APR over six years (72 payments) will have a total interest cost of $5,920.
a. Verify that the difference in total interest of $3,024 is correct.
b. Why would you be willing to pay this extra interest?