Final answer:
The total amount of interest paid by the student is $2,423.80.
Therefore, the correct answer is: option "$2,423.80."
Step-by-step explanation:
To determine the total amount of interest the student paid, we need to calculate the interest for each month during the grace period and for the fixed monthly payments period.
First, let's calculate the interest during the grace period of 6 months.
The loan amount is $7,685, and the interest rate is 6.2% compounded monthly. Using the formula:
Interest = Principal x (1 + rate/n)^(n x time) - Principal
Where Principal = $7,685, rate = 6.2%/12, n = 12, and time = 6 months.
Plugging in the values, we get:
Interest = $7,685 x (1 + 0.062/12)^(12 x 6/12) - $7,685
Interest = $347.37
Next, let's calculate the interest during the fixed monthly payments period.
The loan amount is still $7,685, and the interest rate is 6.2% compounded monthly.
The monthly payment is $140.40, and the total payment period is 6 years (72 months).
We can use the formula to calculate the total interest:
Total Interest = Total Payments - Principal
Where Principal = $7,685 and Total Payments = Monthly Payment x Total Payment Period.
Plugging in the values, we get:
Total Interest = $140.40 x 72 - $7,685
Total Interest = $10,108.80 - $7,685
Total Interest = $2,423.80
Therefore, the total amount of interest the student paid is $2,423.80.