If you need to take out a $20,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 7.3% interest for 10 years, a federal unsubsidized loan with 5.8% interest for 10 years, or a private loan with 7.0% interest and a term of 14 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized.

If you need to take out a $20,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 7.3% interest for 10 years, a federal unsubsidized loan with 5.8% interest for 10 years, or a private loan with 7.0% interest and a term of 14 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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