Suppose you borrow money (simple interest) from an unsubsidized Stafford loans t

Question

Suppose you borrow money (simple interest) from an unsubsidized Stafford loans to pay for your of 4 years of college here at FMU. The fixed interest rate is set at 4.75% for the life of the loan. You borrow $3500 your freshman year, $5000 your sophomore year, and $6000 your junior year, and $8000 in your senior year. You get a three-month grace period before you have to make your first payment. How much do you owe then and how much of this is interest? Info: Formula Solution You now begin paying off your Stafford loan from problem 1 you elect the standard repayment plan for 20 years. Under this plan, your monthly payments are a fixed amount of at least $50 each month. a. What is your monthly payment? How much will you pay back in those 20 years? Info: Formula Solution b. You choose to pay the loan off in 10 years. What is your monthly payment? How much will you pay back in those 10 years?

Explanation / Answer

total=22500

per year interest rate is 1068.75

for 20 years 20*1068.75=21375

3 months grace period total months he will pay is (20*12)-3=237 months

we have to clear loan

total amount to be payed 22500+21375=43875

is distributed for 237 months=(43875)/237=$185.126(min amount he have to pay)

if 10 nyears total time is (10*12)-3=117

interest for 10 years =10*1068.75=10687.5

total amount is =22500+10687.5=33187.5

amount paid for month=(33187.5)/117=$283.653(min amount to be payed every month)

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.