Question

Naika took out a $29,300 5 year Federal Loan with an interest rate of 3.22%. She will

have to pay the loan back when she graduates in 4 years. The loan also gives her a
grace period of 12 months after graduation before she has to start making payments.
How much interest will accrue before she begins making payments on the loan?

Answer 1

9514 1404 393

Answer:

$4717.30

Explanation:

Assuming the interest is capitalized only at the start of repayment, the accrued interest is ...

I = Prt

I = ($29,300)(0.0322)(4 +1) = $4717.30

The accrued interest is $4717.30.