Question

When jina had 3 years left in college, she took out a student loan for $14.075. The loan has an annual interest rate of 6.6%. Jina graduated 3 years after acquiring the loan and began repaying the loan immediately upon graduation. According to the terms of the loan, Jina will make monthly payments for 10 years after graduation. During the 3 years she was in school and not making payments, the loan accrued simple interest. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas.

(a) If Jina's loan is subsidized, find her monthly payment subsidized loan monthly payment.
(b) If Jina's loan is unsubsidized, find her monthly payment unsubsidized loan monthly payment. S

Answer 1

To calculate the monthly payment for Jina's subsidized loan, we can use the loan formula. For Jina's subsidized loan with a principal amount of $14,075, an annual interest rate of 6.6%, monthly compounding, and a repayment period of 10 years, the monthly payment is approximately $168.03.

Step-by-step explanation:

To calculate the monthly payment for Jina's subsidized loan, we need to use the loan formula: M = (P * (r / n)) / (1 - (1 + r / n)-nt)

where M is the monthly payment, P is the principal loan amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the total number of years.

For Jina's subsidized loan, the principal amount is $14,075, the annual interest rate is 6.6%, the number of times interest is compounded per year is 12 (monthly compounding), and the total number of years is 10. Plugging in these values, we get:

M = (14075 * (0.066 / 12)) / (1 - (1 + 0.066 / 12)-10*12)

Calculating this gives us a monthly payment of approximately $168.03.