Suppose that after graduation that Sarah must pay back $80,000 in student loans and that she...

 

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Suppose that after graduation that Sarah must pay back $80,000 in student loans and that she has 15 years to do so. She has a direct subsidized undergraduate loan with an interest rate of 4.29%, compounded monthly and this interest starts to accrue the month after she graduates. The terms of her loan are such that she will make a payment at the beginning of each month for 15 years, starting with the month she graduates. Thus, she will make a total of 15 x 12 = 180 payments. Problem 11: The following will guide you through calculating what Sarah will pay each month. Note that this can be treated analogously to the Credit Card Debt example! Make sure you adapt the formula used there! A. Show that the future value of the Debt, D, after 15 years (n = 180) is $151,534.07. B. Suppose Sarah pays back P at the start of each month. Find the total amount Repaid, R, after 15 years (n = 180) in terms of P. C. Sarah will be out of debt when D = R. Since you know D = R when n = 180, equate the above results to find the value for P that Sarah must repay at the start. of each month. Suppose that after graduation that Sarah must pay back $80,000 in student loans and that she has 15 years to do so. She has a direct subsidized undergraduate loan with an interest rate of 4.29%, compounded monthly and this interest starts to accrue the month after she graduates. The terms of her loan are such that she will make a payment at the beginning of each month for 15 years, starting with the month she graduates. Thus, she will make a total of 15 x 12 = 180 payments. Problem 11: The following will guide you through calculating what Sarah will pay each month. Note that this can be treated analogously to the Credit Card Debt example! Make sure you adapt the formula used there! A. Show that the future value of the Debt, D, after 15 years (n = 180) is $151,534.07. B. Suppose Sarah pays back P at the start of each month. Find the total amount Repaid, R, after 15 years (n = 180) in terms of P. C. Sarah will be out of debt when D = R. Since you know D = R when n = 180, equate the above results to find the value for P that Sarah must repay at the start. of each month.

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answer r 429 112 03575 0003575 na 100 fv D ... View the full answer