Understanding payment size and total interest
Two fictional fixed-rate loans have the same principal and annual rate, no fees, and equal monthly amortizing payments within each loan. One has a longer repayment term. Which comparison is generally correct?
A
The longer-term loan always has both a higher monthly payment and less total interest.
B
The loan term cannot affect the payment because principal is unchanged.
C
A lower monthly payment by itself proves a lower total borrowing cost.
D
The longer-term loan has a lower required monthly payment but greater total interest if both follow their schedules.
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