Both Hannah and Richard took out $15,000 loans to assist in paying for their post-secondary tuition....

Both Hannah and Richard took out $15,000 loans to assist in paying for their post-secondary tuition. Hannah was offered a rate of 4.35% compounded semi-annually, while Richard was offered a rate of 3.5% compounded monthly. Both have agreed to repay the debt in a single payment, 4 years from the date of borrowing. Who will have to pay more to clear their debt, and by how much, as a result of their differing interest rates?

Expert Solution

Interest = Beginning Outstanding amount * Interest * Period of interest/Number of months in an year

Ending outstanding amount = Beginning Outstanding amount + Interest

0.5 resembles 6 months, 0.25 resembles 3 months in an year.

HANNAH
Year	Beginning outstanding Amount	Interest	Ending outstanding Amount
0.5	15000	326.25	15326.25
1	15326.25	333.3459	15659.59594
1.5	15659.59594	340.5962	16000.19215
2	16000.19215	348.0042	16348.19633
2.5	16348.19633	355.5733	16703.7696
3	16703.7696	363.307	17067.07659
3.5	17067.07659	371.2089	17438.2855
4	17438.2855	379.2827	17817.56821

RICHARD
Year	Beginning outstanding Amount	Interest	Ending outstanding Amount
0.25	15000	131.25	15131.25
0.5	15131.25	132.3984	15263.64844
0.75	15263.64844	133.5569	15397.20536
1	15397.20536	134.7255	15531.93091
1.25	15531.93091	135.9044	15667.8353
1.5	15667.8353	137.0936	15804.92886
1.75	15804.92886	138.2931	15943.22199
2	15943.22199	139.5032	16082.72518
2.25	16082.72518	140.7238	16223.44903
2.5	16223.44903	141.9552	16365.40421
2.75	16365.40421	143.1973	16508.60149
3	16508.60149	144.4503	16653.05176
3.25	16653.05176	145.7142	16798.76596
3.5	16798.76596	146.9892	16945.75516
3.75	16945.75516	148.2754	17094.03052
4	17094.03052	149.5728	17243.60329

Hannah ahs to pay more than richard by 573.9649$(17817.56821 - 17243.60329), beacuse of their interest rates.

jeff jeffy answered 2 years ago

You took out some student loans in college and now owe $15,000. You consolidated the loans...

You took out some student loans in college and now owe $15,000. You consolidated the loans into one amortizing loan, which has an annual interest rate of 6% (APR). Part 1 If you make monthly payments of $200, how many months will it take to pay off the loan? Fractional values are acceptable.

You maxed out a credit card to its limit of $15,000 and plan on paying off...

You maxed out a credit card to its limit of $15,000 and plan on paying off this $15,000 balance by making minimum payments of $600 (no other charges will be made with this card as you plan on destroying it once the balance is paid off). On the 8th day of each billing cycle, an automatic payment of $600 will be made to the credit card company which processes and records it on the same day as the payment. At the end...

Chelsea took out three loans for a total of ?$78000 to start an organic orchard. Her?...

Chelsea took out three loans for a total of ?$78000 to start an organic orchard. Her? business-equipment loan was at an interest rate of? 11%, the? small-business loan was at an interest rate of 5?%, and her? home-equity loan was at an interest rate of 4.5?%. The total simple interest due on the loans in one year was ?$4605. The annual simple interest on the? home-equity loan was ?$105 more than the interest on the? business-equipment loan. How much did...

Suppose you took out $20,000 in student loans at a fixed Interest rate of 5% from...

Suppose you took out $20,000 in student loans at a fixed Interest rate of 5% from a bank. Assume that after you graduate 6 months, inflation rate rises unexpectedly from 3% to 6% as you are paying back your loans. Does the unexpected rise in the inflation rate benefit you in paying back your student loans? Why? Who is hurt more from this unexpected rise in the inflation rate in this case? The borrower(The Student) or the Lender(The bank)? Why?...

A) This post is designed to have us find out how secondary sources differ from primary...

A) This post is designed to have us find out how secondary sources differ from primary sources when reporting research information. So, for this post, search the internet for a topic that you would have some interest in researching (e.g., dementia, online course success, vaccines and autism). Specifically, find an article from a secondary source (e.g., CNN, Huffington Post, Bob's Psychology Page) and report the following information: 1. Describe what is being reported. Give a brief description of the source....

Question