Question

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

Answer 1

	Monthly payment	[P×r×(1+r)^n]÷[(1+r)^n-1]
	Here,
1	Interest rate per annum	3.75%
2	Number of years	8
3	Number of compoundings per per annum	12
1÷3	Interest rate per period ( r)	0.31%
2×3	Number of periods (n)	96
	Loan amount (P)	$                                                                                              46,700
	Monthly payment	$                                               563.82
		(46700×0.31%×(1+0.31%)^96)÷((1+0.31%)^96-1)