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.

Solutions

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

Next > < Previous

Related Solutions

You estimate that you will owe $46,700 in student loans by the time you graduate. The...

You estimate that you will owe $46,700 in student loans by the time you graduate. The interest rate is 3.75 percent. If you want to have this debt paid in full within eight years, how much must you pay each month? a- 587.97 b- 464.04 c- 514.28 d- 525.64 e- 563.82

You estimate that you will owe $70,000 in student loans by the time you graduate. The...

You estimate that you will owe $70,000 in student loans by the time you graduate. The interest rate is 6 percent compounded monthly. If you want to have this debt paid in full within 10 years, how much must you pay each month?

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?...

1. You estimate that you will owe $45,300 in student loans by the time you graduate....

1. You estimate that you will owe $45,300 in student loans by the time you graduate. The interest rate is 4.25 percent. If you want to have this debt paid in full within 10 years, how much must you pay each month? Now suppose you decide to defer your payments for 2 years. What will the balance of your loans be when you start to make payments? At this point, how much will you need to pay each month to...

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?

You owe $22,000 on student loans at an annual interest rate of 4.55% compounded monthly. You...

You owe $22,000 on student loans at an annual interest rate of 4.55% compounded monthly. You want to pay off the loan in 14 years. What will your monthly payments be? $ How much interest do you pay? $

Suppose that you plan to borrow $15,000 student loans to attend a university. You are considering...

Suppose that you plan to borrow $15,000 student loans to attend a university. You are considering borrowing the loan from XYZ. XYZ offers two options for the repayment of your loan. One is the deferred repayment option and the other is interest repayment option. The APR for the deferred repayment option is 3.75% and the APR for the interest repayment option is 3.15%. You plan to finish your undergraduate study in university within five years. The two repayment options are...

2. James and Sky owe $24,000 on their student loans at an interest rate of 6.5%....

2. James and Sky owe $24,000 on their student loans at an interest rate of 6.5%. The term is 20 years. Find their monthly payment. 3. Construct the first row of the amortization table for their student loans. How much of their first payment goes toward interest? How much of their first payment goes toward principal? After making their first payment, what is the remaining balance? 4. Construct the second row of the amortization table for their student loans. How...

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?

When Amy had 2 years left in college, she took out a student loan for $14,765....

When Amy had 2 years left in college, she took out a student loan for $14,765. The loan has an annual interest rate of 8.1%. Amy graduated 2 years after acquiring the loan and began repaying the loan immediately upon graduation. According to the terms of the loan, Amy will make monthly payments for 4 years after graduation. During the 2 years she was in school and not making payments, the loan accrued simple interest. (a)If Amy's loan is subsidized,...

Subjects