Phil has been accepted into a 2 year Radiology Technician Program at school. He has been awarded a $9000 unsubsidized 10 year federal loan at 4.29%. He knows he has the option of beginning repayment of the loan in 2.5 years. He also knows that during this non-payment time, interest will accrure at 4.9%. how much interest will Phil accrue during the 2.5 year non payment period?
Added by Sylvia S.
Step 1
5 years of non-payment. To do this, we can use the formula for simple interest: Interest = Principal × Rate × Time In this case, the principal is $9000, the rate is 4.9% (or 0.049 as a decimal), and the time is 2.5 years. Show more…
Show all steps
Your feedback will help us improve your experience
Akash M and 96 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Upon graduation from college, Kelly was able to defer payment on his $40,000 subsidized Stafford student loan for 6 months. Since the interest will no longer be paid on his behalf, it will be added to the principal until payments begin. If the interest is 6.54% compounded monthly, what will the principal amount be when he must begin repaying his loan? Source: SallieMae.
Mathematics of Finance
Simple and Compound Interest
Student loan payment: $A_{n}=P(1+r)^{n}$ If $P$ dollars is borrowed at an annual interest rate $r$ with interest compounded annually, the amount of money to be paid back after $n$ years is given by the indicated formula. Find the total amount of money that the student must repay to clear the loan, if $\$ 8000$ is borrowed at $4.5 \%$ interest and the loan is paid back in 10 yr.
Additional Topics in Algebra
Geometric Sequences
Devon is considering taking out a $\$ 7,000$ loan. He went to two banks. Stevenson Trust Company offered him an 8 -year loan with an interest rate of 8.6$\% .$ First National Bank offered him a 5 -year loan with an interest rate of 10$\% .$ Which loan will have the lower interest over its lifetime?
Consumer Credit
Loan Calculations and Regression
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
100,000+
Students learning Economics with Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD
