Question

Jeffery Wei received a 7-year non-subsidized student loan of $30,000 at an annual interest rate of 5.2%. What are Jeffery's monthly loan payments for this loan after he graduates in 4 years?

Answer 1

$515.56

Step-by-step explanation:

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

So, find interest accrued using simple interest rate formula;

Simple interest (SI)= Principal * rate* time

SI = 30,000*0.052*4

SI = 6240

Next, add this amount to the borrowed loan amount;

Total amount in 4 years = 30,000 + 6,240 = 36,240

Using a financial calculator, input the following to solve for the monthly PMT;

PV = -36,240

FV = 0

Monthly interest rate ; I = 5.2%/12 = 0.433%

N = 7*12 = 84 months

then compute payment; CPT PMT = $515.56