Question

5. [10 points] Consider the following paragraphs from a news article from 2018. The financial problem that just won't die: Student loans For millions of Americans, solid economic growth and low unemployment hasn't cured a festering financial problem: skyrocketing student loans. College debt has hit a new milestone, surpassing $1.5 trillion for the first time. At the same time, experts are scratching their heads over why these loans continue to pile up even as the number of people applying for loans declines. During the past six years loan applications have dropped 20 percent, and yet total student debt has jumped by about $500 billion. One theory is that the cost of higher education continues to rise an average of 3 percent per year. But another explanation is that a federal remedy that's supposed to help students pay their loans is actually making the problem worse. a. Assume the number of loan application has dropped by 20% over the last 6 years, and the average amount of each loan has increase by 3% each year (since cost of Higher Ed increases by that amount). Determine two things: 1. Assume the total value of all loans taken out in 2015 was D dollars. What is the amount taken out in 2021? Find the percentage growth like (1+r)*D

          5. [10 points] Consider the following paragraphs from a news article from 2018. The financial problem that just won't die: Student loans For millions of Americans, solid economic growth and low unemployment hasn't cured a festering financial problem: skyrocketing student loans. College debt has hit a new milestone, surpassing $1.5 trillion for the first time. At the same time, experts are scratching their heads over why these loans continue to pile up even as the number of people applying for loans declines. During the past six years loan applications have dropped 20 percent, and yet total student debt has jumped by about $500 billion. One theory is that the cost of higher education continues to rise an average of 3 percent per year. But another explanation is that a federal remedy that's supposed to help students pay their loans is actually making the problem worse. a. Assume the number of loan application has dropped by 20% over the last 6 years, and the average amount of each loan has increase by 3% each year (since cost of Higher Ed increases by that amount). Determine two things: 1. Assume the total value of all loans taken out in 2015 was D dollars. What is the amount taken out in 2021? Find the percentage growth like (1+r)*D

5. [10 points] Consider the following paragraphs from a news article from 2018. The financial problem that just won't die: Student loans For millions of Americans, solid economic growth and low unemployment hasn't cured a festering financial problem: skyrocketing student loans. College debt has hit a new milestone, surpassing 1.5 trillion for the first time. At the same time, experts are scratching their heads over why these loans continue to pile up even as the number of people applying for loans declines. During the past six years loan applications have dropped 20 percent, and yet total student debt has jumped by about500 billion. One theory is that the cost of higher education continues to rise an average of 3 percent per year. But another explanation is that a federal remedy that's supposed to help students pay their loans is actually making the problem worse. a. Assume the number of loan application has dropped by 20% over the last 6 years, and the average amount of each loan has increase by 3% each year (since cost of Higher Ed increases by that amount). Determine two things: 1. Assume the total value of all loans taken out in 2015 was D dollars. What is the amount taken out in 2021? Find the percentage growth like (1+r)*D

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