Suppose you have the following three student loans: $11,000 with an APR of 7.5%
ID: 3148540 • Letter: S
Question
Suppose you have the following three student loans: $11,000 with an APR of 7.5% for 12 years, $16,000 with an APR of 8% for 17 years, and $14,500 with an APR of 9% for 7 years. a.a. Calculate the monthly payment for each loan individually. b.b. Calculate the total you'll pay in payments during the life of all three loans. c.c. A bank offers to consolidate your three loans into a single loan with an APR of 8% and a loan term of 17 years. What will your monthly payments be in that case? What will your total payments be over the17 years?
Explanation / Answer
a.a:
Given A = 11,000
Loan Payment = A/D
Given n = 12 *12 [12 years times 12 monthly payments per year]
= 144
i = 0.00625 (7.5% divide by 12 monthly payments per year)
D = [(1+0.00625)144 -1] / (0.00625(1+0.00625)144
= 1.4527/0.01533
= 94.762
P = A/D
= 11000 / 94.762
= 116.0803
a(2).
Given A = 16,000
Loan Payment = A/D
Given n = 17 *12 [12 years times 12 monthly payments per year]
= 204
i = 0.00667 (8% divide by 12 monthly payments per year)
D = [(1+0.00667)204 -1] / (0.00667(1+0.00667)204
= 2.8813 /0.0259
= 111.2471
P = A/D
= 16000 / 111.2471
= 143.824
a(3) Given A = 14,500
Loan Payment = A/D
Given n = 7 *12 [ 7 years times 12 monthly payments per year]
= 84
i = 0.0075 (9% divide by 12 monthly payments per year)
D = [(1+0.0075)84 -1] / (0.0075(1+0.0075)84
= 0.8732/0.0141
= 61.9291
Loan Payment = A/D
Given n = 17*12 [ 17 years times 12 monthly payments per year]
= 204
i = 0.0067 (8% divide by 12 monthly payments per year)
D = [(1+0.0067)204 -1] / (0.0075(1+0.0067)204
= 111.2471
P =A/D'
= 41500/111.2471
= 373.0434
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.