0

Guest

Courses New

Betty took out a subsidized student loan of $35,000 at a 4.8% APR, compounded monthly, to pay for her last four semesters of college. If she will begin paying off the loan in 21 months with monthly payments lasting for 20 years, what will be the amount of her monthly payment?

Betty took out a subsidized student loan of $35,000 at a 4.8% APR, compounded monthly, to pay for her last four semesters of college. If she will begin paying off the loan in 21 months with monthly payments lasting for 20 years, what will be the amount of her monthly payment? 

Grade:12

1 Answers

Arun
25750 Points
6 years ago
Dear student
 
Hi Chelsie 

Her amount due = 35,000(1.004)^273 
If her monthly payment is x 
She'll pay = x(1.004)^240 + x(1.004)^239 + ....x(1.004)^1 + x 
= x[(1.004)^241 - 1]/(1.004-1) = 
Her payment = Amount due 
so 
x[(1.004)^241 - 1]/(1.004-1) = 35000(1.004)^273 
404x = 35000(1.004)^273 = 104081
x = 104081/404 = $257.6

Monthly payment = $257.6
 
Regards
Arun (askIITians forum expert)

Think You Can Provide A Better Answer ?

Other Related Questions on 9 grade maths

View all Questions »

ASK QUESTION

Get your questions answered by the expert for free

Answer and earn gift vouchers

Win Gift vouchers upto Rs 500/-

View courses by askIITians

Design classes One-on-One in your own way with Top IITians/Medical Professionals

Click Here Know More

Complete Self Study Package designed by Industry Leading Experts

Click Here Know More

Live 1-1 coding classes to unleash the Creator in your Child

Click Here Know More

a Complete All-in-One Study package Fully Loaded inside a Tablet!

Click Here Know More