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.

Expert Solution

Information provided:

Present value= $15,000

Monthly payment= $200

Monthly interest rate= 6%/12= 0.50%

The time taken to payoff the loan is computed by entering the below in a financial calculator:

PV= -15,000

PMT= 200

I/Y= 0.50

Press the CPT key and N to compute the time taken to payoff the loan.

The value obtained is 94.2355.

Therefore, it takes 94.24 months to payoff the loan.

jeff jeffy answered 2 years ago

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