uestion #$4$: Fixed$-$Payment Loan $[15$ Points$]$

Henry calculated that in order to pay for his UC Berkeley education he would need borrow

$$34,600$ in student loans. He proceeds to take out a Stafford Loan that has an interest rate of

$6\mathrm{.}8\%($i $=0\mathrm{.}068).$ Assume that the payments on the loan are made yearly and are fixed. Upon

graduation, Stafford Loan gives Henry two repayment plans. He can make fixed annual

payments over $15$ years or he can make fixed annual payments over $25$ years.

$($a$)$ What will be the annual fixed payments if Henry chooses to pay off the loan in $15$ years?

$[5$ Points$]$

$($b$)$ What will be the annual fixed payments if Henry chooses to pay off the loan in $25$ years?

$[5$ Points$]$

$($c$)$ How much interest will Henry pay under the $15$ year plan? How much interest will Henry

pay under the $25$ year plan?