Question

Student Loan Tomás takes out a $33,400 student loan to pay his expenses while he is in college. After graduation, he will begin making payments of $200.25 per month for the next 30 years to pay off the loan. How much more will Tomás end up paying for the loan than the original value of $33,400

Answer 1

$38,690.

Explanation:

To calculate how much more Tomás will end up paying for the loan than the original value of $33,400, we need to determine the total amount he will pay over the course of 30 years.

First, we need to calculate the total number of payments Tomás will make. Since he will be making monthly payments for 30 years, the total number of payments will be 30 years * 12 months/year = 360 payments.

Next, we can calculate the total amount he will pay by multiplying the monthly payment amount by the total number of payments. In this case, the monthly payment is $200.25, so the total amount paid will be $200.25 * 360 = $72,090.

To find out how much more Tomás will end up paying than the original value of $33,400, we subtract the original loan value from the total amount paid. Therefore, the difference is $72,090 - $33,400 = $38,690.

Therefore, Tomás will end up paying $38,690 more for the loan than the original value of $33,400.