Question

The average college graduate in the state of Texas owes appropriately $33,400. Per the loan documents, you have ten years to pay off this debt, and the lender charges a 5.50% annual percentage rate. Using the information above, calculate how much the average college graduate will pay per month on their student loans. (If you expect to have zero student loan debt, calculate the monthly payment, but you do not need to include it in the household debt collection.)

Answer 1

The average college graduate in Texas with a $33,400 student loan debt will pay approximately $358.08 per month on their student loans.

Step-by-step explanation:

To calculate the monthly payment on a student loan, we can use the loan's interest rate, the loan amount, and the number of payments.

In this case, the average college graduate owes $33,400, has a 10-year loan term, and a 5.50% annual percentage rate. We can use the formula for calculating the monthly payment on a loan, which is:

Monthly Payment = (Loan Amount * Interest Rate / 12) / (1 - (1 + Interest Rate / 12)-Number of Payments)

Using this formula, we can plug in the values:

Loan Amount = $33,400

Interest Rate = 5.50% or 0.055

Number of Payments = 10 years * 12 months/year = 120 months

Now let's calculate the monthly payment:

Monthly Payment = ($33,400 * 0.055 / 12) / (1 - (1 + 0.055 / 12)-120)

This calculation gives us a monthly payment of approximately $358.08.