Question

Claudius took out an unsubsidized Stafford loan at the beginning of his six-year college career. The loan had a principal of $4,850, an interest rate of 6.5% compounded monthly, and a duration of ten years. If Claudius started paying off the loan when he graduated, what is his monthly payment

Answer 1

b $ 85.25

Step-by-step explanation:

Answer 2

$55.07

Step-by-step explanation:

In this question we use the PMT formula that is shown in the attachment

Given that,

Present value = $4,850

Future value or Face value = $0

Interest rate = 6.50% ÷ 12 = 0.54%

NPER = 10 years × 12 = 120 years

The formula is shown below:

= PMT(RATE;NPER;-PV;FV;type)

The present value come in negative

So, after solving this, the monthly payment is $55.07