Question

Jane took out a loan for college with an interest rate of 5.2%. After graduating 4 years later, she has to pay 11,960 in interest. Find the original

Answer 1

To find the original loan amount that Jane took out, you can use the following formula:

Original loan amount = (Interest paid / Interest rate) * (1 - 1/(1 + Interest rate)^(Number of years))

Plugging in the values, we get:

Original loan amount = (11,960 / 5.2%) * (1 - 1/(1 + 5.2%)^4)

Original loan amount = (11,960 / 0.052) * (1 - 1/(1.052)^4)

Original loan amount = $22,942.31