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Hal 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, and Hal will pay each of them back by making monthly payments, starting as he graduates. Hal’s loans are detailed in the table below.

1:Year
2:Loan Amount ($)
3:Interest Rate (%)
4:Subsidized?

1: Junior
2: 4,048
3: 5.9
4: No

1: Senior
2: 5,295
3: 7.6
4: Yes

Once all of his loans are paid off, what will Hal’s total lifetime cost be? Round all dollar values to the nearest cent.
a.
$9,023.28
b.
$8,467.20
c.
$11,498.40
d.
$13,615.20

Respuesta :

anthougo

Hal's total lifetime cost will be d. $13,615.20.

Data and Calcuulations:

Table detailing the Loans:

1:     Year                                      Junior        Senior

2:     Loan Amount ($)                 4,048         5,295

3:     Interest Rate (%)                    5.9%           7.6%

4:     Subsidized?                        No               Yes

5:     Future value                    4,539.76      5,295

6:     Total repayment           $6,020.76    $7,575.51

Total lifetime cost = $ 13,596.27 ($6,020.76 + $7,575.51)

Note: the future value of the loan is determined based on no subsidy and interest rate compounded for two years for the Junior Loan.

Junior Loan:

Loan Amount after two years = $4,539.76

Loan Term = 10 years

Interest Rate = 5.9%

Compound

Monthly (APR)

Pay Back Every Month

 

Results:

Payment Every Month   $50.17

Total of 120 Payments   $6,020.76

Total Interest   $1,481.00

Senior Loan:

Loan Amount = $5,295

Loan Term = 10 years

Interest Rate = 7.6%

Compound Monthly (APR)

Pay Back Every Month

 

Results:

Payment Every Month   $63.13

Total of 120 Payments   $7,575.51

Total Interest   $2,280.51

Thus, Hal's total lifetime cost will be d. $13,615.20.

Learn more about the lifetime cost of a loan here: https://brainly.com/question/12233464 and

https://brainly.com/question/11874630

Answer:

(D) $13,615.20

Step-by-step explanation:

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