Question

Phillip took out a subsidized student loan of $25,000 at a 2.4% APR, compounded monthly, to pay for his last four semesters of college. If he will begin paying off the loan in 21 months with monthly payments lasting for 20 years, what will be the amount of his monthly payment?

Answer 1

................................... $131.26

Answer 2

total monthly payment comes out to be $136.886

Explanation:

Philip took out a student loan of $25,000 at a 2.4% APR, compounded monthly.

P=$25,000

r=0.024

n=12

n t = 21

If he will begin paying off the loan in 21 months.

First we find the amount of loan in 21 months.

we know,

`A = P(1+(r)/(n))^(nt)`

`A = 25000(1+(0.024)/(12))^(21)\\A = 26071.27`

So, Randy will pay loan off on $26071.27

Formula for Loan Formula:

`P=(PV.r)/(1-(1+r)^(-n))\\P=(26071.27* (0.024)/(12))/(1-(1+(0.024)/(12))^(-240))\\P = 136.886`

hence, total monthly payment comes out to be $136.886