Question

You estimate that you will owe $45,300 in student loans by the time you graduate. the interest rate is 4.25 percent. if you want to have this debt paid in full within ten years, how much must you pay each month

Answer 1

Hi there
The formula of the present value of annuity ordinary is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 45300
PMT monthly payment?
R interest rate 0.0425
K compounded monthly 12
N time 10 years
We need to solve for pmt
Pmt=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
PMT=45,300÷((1−(1+0.0425÷12)^(
−12×10))÷(0.0425÷12))
=464.04...answer

Hope it helps