You expect to graduate with $44200 in student loans. The interest rate on your loan is...

You expect to graduate with $44200 in student loans. The interest rate on your loan is 4.8 percent compounded monthly and the loan calls for fixed monthly payments. If you repay the loan in 21 years how much are you paying in total interest over the life of the loan? (HINT: you need to calculate the monthly payment first).

Expert Solution

To calculate total interest, first we will calculate the monthly installment after that to find out total payment during the life of loan we will multiply that installment with total no of installment and deduct the outcome from loan amount, the residual will be total interest over the life of the loan

			Lets calculate Monthly installment

Principal	44,200
Years of Loan	21
Total monthly installment	252	=21*12
Annual Interest Rate	4.80%
Monthly Interest Rate	0.4%	(4.8/12)%

Calculation of monthly mortgage payment
=(44200.4%(1+.4%)^252)/((1+.4%)^252-1)	278.72


Total Payment Will be made	70,237.44	=278.72*252
Less: Loan Amount	44,200.00
Total interest over the life of loan=70237.44-44200	26,037.44

jeff jeffy answered 1 year ago

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