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AAFM CWM_LEVEL_2 Exam - Topic 4 Question 114 Discussion

Section B (2 Mark)You borrowed Rs8500, with the understanding that you are to make monthly payments over 36 months. Interest is charged at 7% compounded monthly. If you were to increase your payments by Rs20 per month, how much less time would it take you to pay back the loan?
B) 2.81 months
A) 2.49 months
C) 3.28 months
D) 1.55 months

AAFM CWM_LEVEL_2 Exam - Topic 4 Question 114 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 114
Topic #: 4
[All CWM_LEVEL_2 Questions]

Section B (2 Mark)

You borrowed Rs8500, with the understanding that you are to make monthly payments over 36 months. Interest is charged at 7% compounded monthly. If you were to increase your payments by Rs20 per month, how much less time would it take you to pay back the loan?

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Suggested Answer: B

by Hyun at Apr 08, 2026, 03:47 AM

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Jodi
5 days ago
I feel like I need to use a formula for this.
upvoted 0 times
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Edna
10 days ago
I think it’s about calculating the impact of extra payments.
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Valda
15 days ago
This question is tricky!
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Claribel
20 days ago
So, which option is the right answer?
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Sang
25 days ago
Totally agree, every little bit helps!
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Judy
1 month ago
Wait, can you really pay it off that much faster?
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Rodolfo
3 months ago
Increasing payments by Rs20 is a smart move!
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Lili
3 months ago
The loan amount is Rs8500 at 7% interest.
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Louisa
3 months ago
I think the answer might be around 2.81 months, but I need to double-check my formulas for the monthly compounding part.
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Magnolia
3 months ago
This seems familiar! I feel like I’ve seen options like these before, but I’m not confident in my calculations for the time saved.
upvoted 0 times
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Marcos
4 months ago
I think I recall that increasing payments can significantly reduce the loan term, but I’m a bit confused about how to apply the compounding interest here.
upvoted 0 times
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Venita
4 months ago
I remember we practiced a similar question about loan repayments, but I’m not sure how to calculate the exact time reduction with the extra payment.
upvoted 0 times
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