Answer
The monthly payment is less in case of 6 years and the payment of total interest is less in case of 3 years.
Work Step by Step
PMT is the amount of payment regular made in context of time value of money. This is basically used to calculate the payment for a loan by considering the rate of interest and a payment made at regular interval. Rate of interest and payment made at regular interval can be fixed.
PMT is calculated by using the formula as given below:
$PMT=\frac{P\left( \frac{r}{n} \right)}{\left[ 1-{{\left( 1+\frac{r}{n} \right)}^{-nt}} \right]}$
The situation in which the interest rate of two loans are equal but the period of loan varies from 3 to 6 years, in such a case, the monthly payment is less where the loan period is 6 years but at the same time the interest paid is more in comparison to 3 years. This is due to the reason of time value of money.
