Question

Student A owes $43,361.44 for tuition and Student B owes $31,761.44. Calculate the interest that would be charged (for both students) before the 1st payment if the student took out an unsubsidized loan. Assume the first payment in 2.5 years after taking the loan. Fixed interest rate: 4.529%

Answer 1

Answer:To calculate the interest charged for both Student A and Student B before the first payment, we can use the formula for calculating simple interest:Interest = Principal (initial amount borrowed) * Interest Rate * TimeGiven:Fixed Interest Rate: 4.529%Time (in years) before the first payment: 2.5 yearsFor Student A:

Principal (amount borrowed) = $43,361.44

Interest Rate = 4.529%

Time = 2.5 yearsInterest for Student A = $43,361.44 * 0.04529 * 2.5

Interest for Student A ≈ $4,904.47For Student B:

Principal (amount borrowed) = $31,761.44

Interest Rate = 4.529%

Time = 2.5 yearsInterest for Student B = $31,761.44 * 0.04529 * 2.5

Interest for Student B ≈ $3,589.45So, the interest charged for Student A before the first payment would be approximately $4,904.47, and for Student B, it would be approximately $3,589.45.

Explanation: