Question

Marco took out an unsubsidized student loan for $20,000 which he will start paying in four years after he graduates if the interest rate is 4.2% what is the amount he will or once he graduates

Answer 1

I'm going to assume that this is compound interest, as simple interest in this case would not make sense.

Let A be the final amount ( in this case, after 4 years). A = 20,000(1+0.042/12)^12*4. In this formula, I am assuming that the interest compounds 12 times a year, or every month. I am also assuming that he pays it off once he hits the 4-year mark.

If the assumptions are correct, he would be paying $23651.79 at the 4-year mark.

Explanation: