September 1 of its year, that you finish college in four years, that you do not pay the accruing interest in the meantime, and that you begin repayment on December 1 after graduation. You also borrow $7500 for each of your third and fourth years, again on September 1, all at a 4.29% interest rate. You finish college in four years, and you begin repayment on December 1 after graduation. What is your total debt then, and how much of that is interest?
A) Suppose that you borrow $5500 for your first year and $6500 for your second year (the maximum amounts for a dependent student), as federal direct student loans at a 4.29% interest rate. Suppose that each loan begins on September 1 of its year, that you finish college in four years, that you do not pay the accruing interest in the meantime, and that you begin repayment on December 1 after graduation. You also borrow $7500 for each of your third and fourth years, again on September 1, all at a 4.29% interest rate. You finish college in four years, and you begin repayment on December 1 after graduation. What is your total debt then, and how much of that is interest?
B) Assume the same situation as in part A, but you also borrow $75000 for each of your third and fourth years (again, the maximum amounts), again on September 1, all at a rate of 4.29% interest rate. You finish college in four years, and you begin repayment on December 1 after graduation, What is your total debt on that December 1, and how much of that is interest?
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