Question

Jeffery Wei received a 6-year non-subsidized student loan of $30,000 at an annual interest rate of 5.3%. What are Jeffery's monthly loan payments for this loan after he graduates in 4 years? (Round your answer to the nearest cent.)

Answer 1

According to the statement, the student received a:

• non-subsidized loan,

,

• to be paid in 6 years,

,

• of a principal amount of money P = 30,000,

,

• with an annual interest rate, i = 5.3% = 0.053.

Since the loan is non-subsidized, the interest would accrue during the 4 years Jeffery is in college.

We compute the accrued interest in the following way:

`\begin{gathered} I=P\cdot r\cdot T \\ I=30000\cdot0.053\cdot4 \\ I=6360 \end{gathered}`

The total amount of money to be paid is the sum of the principal amount P and the interest I:

`\begin{gathered} T=M+I \\ T=30000+6360 \\ T=36360 \end{gathered}`

Now, the total amount of the loan will be paid monthly, we compute the value of each paid as: