Suppose you have a student loan of $25,000 with an APR of 6% for 30 years. Compl

Question

Suppose you have a student loan of $25,000 with an APR of 6% for 30 years. Complete parts (a) through (c) below. a. What are your required monthly payments? The required monthly payment is Do not round until the final answer. Then round to the nearest cent as needed.) b. Suppose you would like to pay the loan off in 15 years instead of 30. What monthly payments will you need to make? The monthly payment required to pay off the loan in 15 years instead of 30 is (Do not round until the final answer. Then round to the nearest cent as needed.) c. Compare the total amount you'll pay over the loan term if you pay the loan off in 15 years versus 30 years Total payments for the 30-year loan-S Total payments for the 15-year loan

Explanation / Answer

a) Required monthly payments

= pmt(0.06/12, 30*12, 25000) [Excel Formula]

= $ 149.89

b) Monthly payment in case of 15 years

= pmt(0.06/12, 15*12, 25000) [Excel Formula]

= $ 210.96

c) Total payment for 30 - year loan = $ 149.89*30*12 = $ 53960.40

Total payment for 15 - year loan = $ 210.96*15*12 = $ 37972.80

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

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