Answered

Welcome to Westonci.ca, the place where your questions are answered by a community of knowledgeable contributors. Discover precise answers to your questions from a wide range of experts on our user-friendly Q&A platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

Toby just graduated from four years of college. at the beginning of each year, he took out a stafford loan with a principal of $6,125. each loan had a duration of ten years and an interest rate of 5.3%, compounded monthly. all of the loans were subsidized. toby plans to pay off each loan in monthly installments, starting from his graduation. what is the total lifetime cost for toby to pay off his 4 loans? round each loan's calculation to the nearest cent. a. $7,904.04 b. $31,616.16 c. $10,393.82 d. $36,490.25 please select the best answer from the choices provided a b c d

Sagot :

jayilych4real

If he starts paying after four years, the worth of the loans by then is b. $31,616.16

What is a Loan?

This refers to the amount collected from a lender to be repaid after a given time, usually with added interest.

Hence, we can see that:

The effective monthly interest rate is:

i = 0.053/12 = 0.0044

The effective annual interest rate is:

i = (1 + 0.0044)^12 -1 = 0.0543

The present worth of all the loans is:

P = 6125 + 6125 (1 + 0.0543)^-1 + 6125 (1 + 0.0543)^-2 + 6125(1 + 0.0543)^-3

P = $22,671.40

If he pays them prompty, then the total lifetime cost would be

P = 22671.40 (1 + 0.0543)^4 = $31,616.16

Read more about loans here:

https://brainly.com/question/2363571

#SPJ4

Thank you for your visit. We are dedicated to helping you find the information you need, whenever you need it. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.