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Antonio has just graduated from four years of college. For the last two years, he took out a Stafford loan to pay for his tuition. Each loan had a duration of ten years and interest compounded monthly. Antonio will pay each of them back by making monthly payments, starting as he graduates. Antonio’s loans are detailed in the table below. Year Loan Amount ($) Interest Rate (%) Subsidized? Junior 5,894 6. 9 Y Senior 5,258 7. 5 N Once all of his loans are paid off, what will Antonio’s total lifetime cost be? Round all dollar values to the nearest cent. A. $16,246. 80 b. $17,804. 40 c. $7,593. 16 d. $9,874. 76 Please select the best answer from the choices provided A B C D.

Sagot :

shubhamchouhanvrVT

Antonio’s total lifetime cost will be $11680.99 after calculating all loans

What will be Antonio’s total lifetime cost?

Given that

Loan Amount ($)

5,894$

5,258$

Interest Rate (%)

6.9%

7.5%

Now for the loan amount 5,894$ at 6.9% interest, the amount will be

[tex]A=P(1+\dfrac{r}{h} )^{n\times t}[/tex]

[tex]A=5894(1+\dfrac{0.069}{12} )^{12\times 10}[/tex]

[tex]A=5894\times(1.00575)x^{120} =11727.76[/tex]

Now for the loan amount 5.258$ at 7.5% interest, the amount will be

[tex]A=5258(1+\dfrac{0.075}{12} )^{12\times 10}[/tex]

[tex]A=5258\times2.1120=111105.23[/tex]

So the total lifetime cost will be

[tex]=11727.76-5894+111105.23-5258=11680.99[/tex]

Thus Antonio’s total lifetime cost will be $11680.99 after calculating all loans

To know more about Compound interest follow

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