Question

Question 3 of 25

Bertha took out a subsidized student loan of $14,250 at an 8.4% APR,
compounded monthly, to pay for her last 2 semesters of college. If she will
begin paying off the loan in 15 months, how much will she owe when she
begins making payments?
OA. $14,250.00, since the government is responsible for the interest
on the loan that accrues before Bertha starts making payments
OB. $15,821.84, since Bertha is responsible for the interest on the loan
that accrues before she starts making payments
OC. $15,821.84, since the government is responsible for the interest
on the loan that accrues before Bertha starts making payment
OD. $14,250.00, since Bertha is responsible for the interest on the loan
that accrues before she starts making payments

Answer 1

Bertha will owe approximately $15,821.84 when she begins making payments on her student loan.

Step-by-step explanation:

To calculate the total amount Bertha will owe when she begins making payments on her subsidized student loan, we need to calculate the interest that accrues over the 15-month period. The formula for compound interest is:

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

Where:

• A is the total amount
• P is the principal amount, which is $14,250 in this case
• r is the annual interest rate in decimal form, which is 8.4% or 0.084
• n is the number of times interest is compounded per year, which is 12 for monthly compounding
• t is the time in years, which is 15/12 = 1.25 for 15 months

Plugging in the values, we get:

A = $14,250(1 + 0.084/12)^(12*1.25)

A ≈ $15,821.84

Therefore, Bertha will owe approximately $15,821.84 when she begins making payments on her student loan.