After Lois graduates in 3 years, her monthly payment on the 9-year subsidized student loan of $32,000 at 4.375% interest is $412.96.
The monthly payment can be determined using the simple interest system as follows:
N (# of periods) = 108 months (9 years x 12)
I/Y (Interest per year) = 4.375%
PV (Present Value) = $32,000
FV (Future Value) = $0
Total interest = $12,600 ($32,000 x 4.375% x 9)
Total amount to be repaid = $44,600 ($32,000 + $12,600)
Monthly payment = $412.96 ($44,600 ÷ 108)
Thus, Lois will repay $412.96 monthly for 9 years after she graduates in 3 years.