Question

Ron has $52,000 remaining on his student loan with an annual interest rate of 8%. He plans to pay off the loan in 20

years. Assume that he can refinance his loan at 6%. Use the table below to answer the questions.
a) What are his monthly payments on the original loan? $
b) How much will his new monthly payment be?
$
4 years
$22.58
23.03
23.49
24.41
r
3 years
$29.53
29.97
30.42
31.34
32.27
33.21
Monthly payments on a $1,000 loan.
4%
5%
6%
8%
10%
12%
25.36
26.33
10 years
$10.12
10.61
11.10
12.13
13.22
14.35
20 years
$6.06
6.60
7.16
8.36
9.65
11.01
30 years
$4.77
5.37
6.00
7.34
8.78
10.29

Answer 1

a) To find the monthly payments on the original loan, we can use the table provided. The table shows the monthly payments on a $1,000 loan for various interest rates and loan terms. Since Ron's original loan has an interest rate of 8% and a term of 20 years, we look for the corresponding value in the table. However, the table does not provide this information.

b) If Ron refinances his loan at 6%, we can use the table to find the new monthly payment. However, the table does not provide the monthly payment for a $1,000 loan at 6% interest for 20 years.

Explanation: