While Andy was a student at Albury University, he borrowed $25,000 in student loan at an...

While Andy was a student at Albury University, he borrowed $25,000 in student loan at an annual interest rate of 7%. If he repays $2,000 per year, calculate the period required (to the nearest year) to pay off his debt.

Expert Solution

Answer: Andy have to pay for 31 years to pay off his debt.

I am attaching a excel file with proper calculations. Please find the file.

(All amount in Dollars)

Years	Principal	Interest	Due at the start	Payment	Due at the end
0	25000	-	25000	-
1	-	1750	26750	2000	24750
2	-	1732.5	26482.5	2000	24482.5
3	-	1713.775	26196.275	2000	24196.275
4	-	1693.7393	25890.01425	2000	23890.01425
5	-	1672.301	25562.31525	2000	23562.31525
6	-	1649.3621	25211.67731	2000	23211.67731
7	-	1624.8174	24836.49473	2000	22836.49473
8	-	1598.5546	24435.04936	2000	22435.04936
9	-	1570.4535	24005.50281	2000	22005.50281
10	-	1540.3852	23545.88801	2000	21545.88801
11	-	1508.2122	23054.10017	2000	21054.10017
12	-	1473.787	22527.88718	2000	20527.88718
13	-	1436.9521	21964.83929	2000	19964.83929
14	-	1397.5387	21362.37803	2000	19362.37803
15	-	1355.3665	20717.7445	2000	18717.7445
16	-	1310.2421	20027.98661	2000	18027.98661
17	-	1261.9591	19289.94568	2000	17289.94568
18	-	1210.2962	18500.24187	2000	16500.24187
19	-	1155.0169	17655.2588	2000	15655.2588
20	-	1095.8681	16751.12692	2000	14751.12692
21	-	1032.5789	15783.7058	2000	13783.7058
22	-	964.85941	14748.56521	2000	12748.56521
23	-	892.39956	13640.96478	2000	11640.96478
24	-	814.86753	12455.83231	2000	10455.83231
25	-	731.90826	11187.74057	2000	9187.740571
26	-	643.14184	9830.882411	2000	7830.882411
27	-	548.16177	8379.04418	2000	6379.04418
28	-	446.53309	6825.577272	2000	4825.577272
29	-	337.79041	5163.367681	2000	3163.367681
30	-	221.43574	3384.803419	2000	1384.803419
31	-	96.936239	1481.739658	2000	-518.2603416

jeff jeffy answered 2 years ago

Bradley borrowed $72,500 in student loans and he has just graduated from Elon University. He earns...

Bradley borrowed $72,500 in student loans and he has just graduated from Elon University. He earns enough at his new job to allow him to pay $575 per month on the loan. If the annual rate on the student loan is 4.38% (compounded monthly), how long will it take Bradley to pay off his student loans? Specify the number of months to the nearest whole number Chandler found his dream mountain home, valued at $245,000. He plans to buy a...

COLLAPSE The student governing board at Milton University consists of 7 members: Andy, Bill, Cathy, David,...

COLLAPSE The student governing board at Milton University consists of 7 members: Andy, Bill, Cathy, David, Evelyn, Frank, Gina. List and count the different ways of electing each of the following: · A president and a secretary if one person can hold both offices · A president and a secretary if the president must be a female · A president and a secretary if the two officers must not be the same sex · A president, a secretary, and a...

Suppose Shin borrowed $70,000 on a student loan at a rate of 10% and must repay...

Suppose Shin borrowed $70,000 on a student loan at a rate of 10% and must repay it in 5 equal installments at the end of each of the next 5 years. a. Construct an amortization schedule. b. What is the annual interest expense for the borrower and the annual interest income for the lender during Year 4?

Five years ago the average university student owed $19,000 in student-loan debt at the time of...

Five years ago the average university student owed $19,000 in student-loan debt at the time of graduation. With all the cuts in funding, it is suspected that this amount has gone up. A survey of 45 recent university graduates revealed an average student-loan debt of $20,000. Assume that the population standard deviation is $2,500. a) Define the parameter of interest (in words), and then formulate the null hypothesis and the alternative hypotheses. b) Find the p-value and make a conclusion...

While you were a student in college, you borrowed $12,000 instudent loans at an interest...

While you were a student in college, you borrowed $12,000 in student loans at an interest rate of 9%. If you repay $125 per month, how long (in months) will it take you to repay the loan? How many years is this?

Ian loaned his friend $25,000 to start a new business. He considers this loan to be...

Ian loaned his friend $25,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 9% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he...

A student borrowed a total of $120,500 from the living expenses loan under FASP. Assuming th...

A student borrowed a total of $120,500 from the living expenses loan under FASP. Assuming th annual interest rate is 1%, calculate the quarterly installment amount if she wants to pay off the debt in 5 years after graduation. Need formula and answer only. Thanks.

John is a university student in L.A. He is going home to Boston for the summer...

John is a university student in L.A. He is going home to Boston for the summer and has started looking for a summer internship. After a couple of months of searching, he finds an amazing internship with a small, local company in his hometown. His interview goes really well, and he is offered the internship. As he is reading through the internship offer, he discovers that the company hires interns for a strict minimum of 6 months. What should John...

Ali is a student at the University. He recently purchased a car for OMR5,000 to use...

Ali is a student at the University. He recently purchased a car for OMR5,000 to use it for going to the University. Ali also expects that other friends might ask for transportation from him. He expects a total monthly revenue of OMR50. He expects fuel cost to be OMR40 per month. One of Ali's friends is a taxi driver. He offered Ali to take him to University for a monthly fee of OMR10. Because he does not have to drive,...

A student loan paid faithfully for 23 years had the following statistics: Borrowed: $26,400 Paid back...

A student loan paid faithfully for 23 years had the following statistics: Borrowed: $26,400 Paid back to date: $32,700 Still Owes: $45,276.63 Assuming the student calculated the amount paid back without discounting them and the payments are equal and paid monthly, how much did they pay each month? Compute the annual rate of interest that the student agreed to pay when they took out the loan. (Hint: Use Excel’s RATE function to calculate this)

Question