Question
In: Finance
I need detailed explanation: Assume you are in repayment on $50,000 in student loans. The terms...
I need detailed explanation:
Assume you are in repayment on $50,000 in student loans. The terms of your loan are a 10-year (120 period) repayment term at a 5% annual interest rate (compounded interest).
(a) Assuming you make all your monthly payments on time, how much will you pay back in total over the lifetime of this loan?
On March 27, 2020, Congress passed the CARES Act, which, among other things, automatically placed all student loans currently in repayment into administrative forbearance for the six month period from April to September 2020.23 What his means in practice is that borrowers are not required to make payments over these six months and no interest charges or penalties are accrued over these six months. Even though you are not required to make payments from April until September, suppose you decide to continue making your payment anyway for parts (b) and (c).
(b) Assume you would have entered repayment on this loan on April 1. How much less will you pay in total over the lifetime of this loan?
(c) Now assume that, as of April 1, you were halfway through paying back your loan (i.e. you had made 60 consecutive monthly payments). In this case, how much less will you pay in total over the lifetime of this loan?
Solutions
Expert Solution
Please see the summary of the total answer, detailed explanation on the table.
| Interest rate | 5% | EMI | ($530.33) |
| Interest rate Monthly | 0.42% | Total Installment * 120 | ($63,639.31) |
| Loan Amount | 50000 | Intertest Paid Normal Sceneario | ($13,639.31) |
| Tenure | 120 | Amount paid with Subsidy | (62,793.71) |
| EMI Start date | 15/03/2015 | Total interest payment | (12,793.71) |
| Amount Saved | ($845.60) |
EMI = [P x R x (1+R)^N]/[(1+R)^N-1], P =
50000R=.42%,N = 120, EMI = $ 530.33.Can be use
Excel Formula PMT = PMT (.42%,120,50000,0,0)
Please see the below repayment history. There some restriction to
show calculation from Month 1 onwards hence please see the interets
rate details from 61st month onwards.
outstanding balance. (based on the interets 0.42% per month $ 28102.43.
| Tenure | Outstanding Balance | Interest | Principal | EMI | Tenure | Outstanding Balance | Interest | Principal | EMI |
| 61 | $ 28,102.43 | April - No Interest | $ (530.33) | $ (530.33) | 91 | $ 14,178.87 | $ 59.08 | $ (471.25) | $ (530.33) |
| 62 | $ 27,572.11 | May - No Interest | $ (530.33) | $ (530.33) | 92 | $ 13,707.62 | $ 57.12 | $ (473.21) | $ (530.33) |
| 63 | $ 27,041.78 | June - No Interest | $ (530.33) | $ (530.33) | 93 | $ 13,234.40 | $ 55.14 | $ (475.18) | $ (530.33) |
| 64 | $ 26,511.45 | July - No Interest | $ (530.33) | $ (530.33) | 94 | $ 12,759.22 | $ 53.16 | $ (477.16) | $ (530.33) |
| 65 | $ 25,981.12 | August - No Interest | $ (530.33) | $ (530.33) | 95 | $ 12,282.06 | $ 51.18 | $ (479.15) | $ (530.33) |
| 66 | $ 25,450.79 | September - No Interest | $ (530.33) | $ (530.33) | 96 | $ 11,802.90 | $ 49.18 | $ (481.15) | $ (530.33) |
| 67 | $ 24,920.47 | $ 103.84 | $ (426.49) | $ (530.33) | 97 | $ 11,321.76 | $ 47.17 | $ (483.15) | $ (530.33) |
| 68 | $ 24,493.98 | $ 102.06 | $ (428.27) | $ (530.33) | 98 | $ 10,838.60 | $ 45.16 | $ (485.17) | $ (530.33) |
| 69 | $ 24,065.71 | $ 100.27 | $ (430.05) | $ (530.33) | 99 | $ 10,353.43 | $ 43.14 | $ (487.19) | $ (530.33) |
| 70 | $ 23,635.65 | $ 98.48 | $ (431.85) | $ (530.33) | 100 | $ 9,866.25 | $ 41.11 | $ (489.22) | $ (530.33) |
| 71 | $ 23,203.81 | $ 96.68 | $ (433.65) | $ (530.33) | 101 | $ 9,377.03 | $ 39.07 | $ (491.26) | $ (530.33) |
| 72 | $ 22,770.16 | $ 94.88 | $ (435.45) | $ (530.33) | 102 | $ 8,885.77 | $ 37.02 | $ (493.30) | $ (530.33) |
| 73 | $ 22,334.71 | $ 93.06 | $ (437.27) | $ (530.33) | 103 | $ 8,392.47 | $ 34.97 | $ (495.36) | $ (530.33) |
| 74 | $ 21,897.44 | $ 91.24 | $ (439.09) | $ (530.33) | 104 | $ 7,897.11 | $ 32.90 | $ (497.42) | $ (530.33) |
| 75 | $ 21,458.35 | $ 89.41 | $ (440.92) | $ (530.33) | 105 | $ 7,399.69 | $ 30.83 | $ (499.50) | $ (530.33) |
| 76 | $ 21,017.44 | $ 87.57 | $ (442.75) | $ (530.33) | 106 | $ 6,900.19 | $ 28.75 | $ (501.58) | $ (530.33) |
| 77 | $ 20,574.68 | $ 85.73 | $ (444.60) | $ (530.33) | 107 | $ 6,398.61 | $ 26.66 | $ (503.67) | $ (530.33) |
| 78 | $ 20,130.08 | $ 83.88 | $ (446.45) | $ (530.33) | 108 | $ 5,894.95 | $ 24.56 | $ (505.77) | $ (530.33) |
| 79 | $ 19,683.63 | $ 82.02 | $ (448.31) | $ (530.33) | 109 | $ 5,389.18 | $ 22.45 | $ (507.87) | $ (530.33) |
| 80 | $ 19,235.32 | $ 80.15 | $ (450.18) | $ (530.33) | 110 | $ 4,881.31 | $ 20.34 | $ (509.99) | $ (530.33) |
| 81 | $ 18,785.14 | $ 78.27 | $ (452.06) | $ (530.33) | 111 | $ 4,371.32 |
 jeff jeffy answered 2 years agoRelated SolutionsPlease explain how to solve this problem: Assume you are in repayment on $50,000 in student...Please explain how to solve this problem:
Assume you are in repayment on $50,000 in student loans. The
terms of your loan are a 10-year (120 period) repayment term at a
5% annual interest rate.
(a) Assuming you make all your monthly payments
on time, how much will you pay back in total over the lifetime of
this loan?
On March 27, 2020, Congress passed the CARES Act, which, among
other things, automatically placed all student loans currently in
repayment...
The answer is B, but I really need a detailed explanation for this. Equal volumes of...The answer is B, but I really need a detailed explanation for
this.
Equal volumes of the following pairs of solutions are mixed.
Which pair will produce a buffer solution?
A. 0.10 mol L-1 HCl and 0.05 mol L-1 NaOH
B. 0.10 mol L-1 HCl and 0.15 mol L-1 NH3
C. 0.10 mol L-1 HCl and 0.05 mol L-1 NH3
D. 0.10 mol L-1 HCl and 0.20 mol L-1 CH3COOH
E. 0.10 mol L-1 HCl and 0.20 mol L-1 NaCl
I need detailed explanation and additionally what influence has the fact that salary increase will be...I need detailed explanation and additionally what influence has
the fact that salary increase will be protected from inflation:
My sister is a public school teacher. She is currently 30 years
old and has a Master’s degree. According to her union contract, if
she earns her Ph.D., she will make $12,000 more per year (Union
contracts also include cost of living increases, so this increase
will be protected from inflation). She plans to retire on her 65th
birthday, and will...
Please i need a detailed explanation of this short article Thinking of the many variables tracked...Please i need a detailed explanation of this short article
Thinking of the many variables tracked by hospitals and doctors'
offices, confidence intervals could be created for population
parameters calculated frommany of them. What variable and
parameter might be most helpful in your work to be able to
create an interval that captures the true value of the
parameter of patients with 95% confidence?
Need detailed explanation. I have the answer 5. Suppose there are two firms, Boors and Cudweiser,...Need detailed explanation. I have the answer
5. Suppose there are two firms, Boors and Cudweiser, each
selling nonalcoholic beer. Suppose Boors and Cudweiser are not
viewed as perfect substitutes but rather demand for Boors is QB =
5000 − 1000PB + 100PC and demand for Cudweiser is QC = 3000 −
1500PC + 100PB. For simplicity, assume zero marginal costs. Which
is the more preferred beer?
a. Boor's b. Cudweiser c. they are equally preferred d. neither
are preferred
I need a detailed answer please! Explain any differences in price in terms of the advantages...I need a detailed answer please!
Explain any differences in price in terms of the advantages
offered by the store/business offering the higher priced item.
(Keep in mind all of the differences that distinguish
monopolistically competitive firms.)
Find the momentum space wavefunction of A/(x^2+a^2). I need detailed, step-by-step explanation.Find the momentum space wavefunction of A/(x^2+a^2).
I need detailed, step-by-step explanation.
Please, I need a correct answer and clear explanation. Thank you, Part I – Explanation Q1...Please, I need a correct answer and clear explanation. Thank
you,
Part I – Explanation
Q1
Below are pairs of changes that affect elements of the
accounting equation. Give an example of a transaction or economic
event that reflects each:
a. Asset increases, asset
decreases
b. Asset increases, liability
increases
c. Asset increases, shareholders’
equity increases
d. Asset increases, revenue
increases
e. Liability decreases, asset
decreases
f. Asset decreases, expense
increases
g. Liability decreases, revenue
increases
h. Asset decreases, shareholders’...
Please provide a detailed explanation: Assume that you work for a multinational company. You manager has...Please provide a detailed explanation:
Assume that you work for a multinational company. You manager
has informed you that different stakeholders would like to know how
the firm is performing relative to the competitors.
i) Identify three potential users of financial ratios, and
explain each user’s focus (i.e., the aspect of the company’s
operations and the operating performance ratios that will be of
interest to them).
Manipulating data, I need more detail explanation. Manipulating data, I need more explanation in detailManipulating data, I need more detail explanation.
Manipulating data, I need more explanation in
detail
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|