A student takes out a loan of $1,400 at the beginning of each semester (semi-annually) for 11 semesters to pay for college. The loan charges 6.6% interest compounded semiannually. The student graduates after the 11 semesters and refinances the loan to a lower 5.9% rate compounded monthly with monthly payments (made at the end of each month) for 120 months. Find the monthly payment and the total interest paid. The monthly payment is $ (Round to the nearest cent as needed.) The total amount of interest paid is $(Round to the nearest cent as needed.)

A student takes out a loan of $1,400 at the beginning of each semester (semi-annually) for 11 semesters to pay for college. The loan charges 6.6% interest compounded semiannually. The student graduates after the 11 semesters and refinances the loan to a lower 5.9% rate compounded monthly with monthly payments (made at the end of each month) for 120 months. Find the monthly payment and the total interest paid. The monthly payment is $ (Round to the nearest cent as needed.) The total amount of interest paid is $(Round to the nearest cent as needed.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Lacy has a $50,000.00 student loan when she graduates on May 4, and the prime rate is set at 4.75%.…

A: Interest charged:Interest charged refers to the additional cost incurred for borrowing the…

Q: A student is graduating from college in 12 months but will need a loan in the amount of $11,576 for…

A: The Value of the loan at the time of repayment: Student loans are given to students to help them…

Q: Victor received an 8 - year subsidized student loan of $23,000 at an annual interest rate of 4.25 %.…

A: Present value (PV) is a budgetary concept that calculates the current worth of future cash flow or…

Q: ans Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling…

A: Calculations:Grace Period (June 1 - Nov 30):Number of Days (Interest accrues for 183 days out of…

Q: Marcela took out a $600 discounted loan with a 4% annual interest rate over a period of 8 months.…

A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…

Q: You have taken out a loan to help with college expenses. The interest rate is 0.4% per month. The…

A: Information given in question ÷ Interest rate is 0.4% per month Monthly interest payment = 80

Q: Angelica Riordan received a four year non-subsidized student loan of $15,000 at an annual interest…

A: Equated monthly payments It is a monthly fixed payment given by the borrower to the lender on the…

Q: Sandy Kupchack just graduated from State University with a bachelor's degree in history. During her…

A: In the given question, the amount is to be paid quarterly. Therefore, the effective rate to be used…

Q: Parents deposit $6,000 into a savings account at the end of each year for 22 years to help their…

A: The nominal interest rate is the rate that is quoted or advertised for a loan or an investment,…

Q: A student takes out a loan of $1,500 at the beginning of each semester (semi-annually) for 11…

A: A loan is a financial agreement in which a lender gives a borrower a certain sum of money; the…

Q: Beginning in January, a person plans to deposit $1000 at the end of each month into an account…

A: We need to use future value of ordinary annuity formula to calculate interest amount. Future value…

Q: Lois received a 9-year subsidized student of $38,000 at an anual interest rate of 3.125%. Determin…

A: A subsidized loan is a type of loan that is offered by the government, typically through the…

Q: Lacy has a $45,000.00 student loan when she graduates on May 4, and the prime rate is set at 5.25%.…

A: Repayment schedule:A repayment schedule outlines the structured plan for repaying a loan over a…

Q: Smith borrows 21,500 to purchase a new car. The car dealer finances the purchase with a loan that…

A: Loan amount = $21,500Number of loan terms = 4 yearsInterest rate for the 1st year = 0%Annual…

Q: Jackie obtained a new credit card from a national bank, MBNA with a stated rate of 18% per year,…

A: The Compound interest is simply the interest on interest. It is the interest that is given on both…

Q: Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling…

A: Part 2: Explanation:Step 1: Calculate the interest accrued during the grace period (June 1 to Nov…

Q: Lacy has a $40,000.00 student loan when she graduates on May 4, and the prime rate is set at 4.75%.…

A: Amortization refers to the systematic and regular repayment of loan. Each payment includes interest…

Q: Angelica received a 12-year non-subsidized student loan of $18,000 at an annual interest rate of…

A: Non-subsidized student loan is a type of student loan that is not subsidized by the Federal…

Q: student has borrowed $34,000 at an annual interest rate of 7.2%. Calculate the amount of interest…

A: Simple interest is the interest on principal portion of loan or deposits.

Q: Steven Riley is borrowing $9,000 for 5 years at 8 percent. Payments are made on a monthly basis,…

A: Loan repayment refers to the process of returning borrowed funds, typically from a lender or…

Q: Tuition of $1632 will be due when the spring term begins in 5 months. What amount should a student…

A: The question is based on the concept of Financial Management. Present value of the future value can…

Q: Jeffery Wei received a 7-year non-subsidized student loan of $32,000 at an annual interest rate of…

A: The amortization refers to the systematic and regular repayment of a loan amount. This monthly…

Q: Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling…

A: Part 2:Explanation:Step 1: Calculate the Interest Charged during the Grace PeriodTo calculate the…

Q: Lacy has a $41,500.00 student loan when she graduates on May 4, and the prime rate is set at 5.5%.…

A: A student loan refers to a loan that is extended only to students to finance their education fees.…

Q: To attend school, Aisha deposits 5800 at the end of every quarter for five and one-half years. What…

A: An annuity refers to a series of payments made in exchange for a lump sum payment. It is used by the…

Q: Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling…

A: A student loan refers to a loan that is extended only to students to finance their education fees.…

Q: Wyatt signs a note for a discounted loan agreeing to pay $4,100 in 6 months at a discount rate of…

A: Loan amount = $4,100 Discount rate = 0.13 Period of loan = 6 months Amount of discount = ? Amount of…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

K
A student takes out a loan of $1,400 at the beginning of each semester (semi-annually) for 11 semesters to pay for college. The loan
charges 6.6% interest compounded semiannually. The student graduates after the 11 semesters and refinances the loan to a lower
5.9% rate compounded monthly with monthly payments (made at the end of each month) for 120 months. Find the monthly payment
and the total interest paid.
NO
The monthly payment is $.
(Round to the nearest cent as needed.)
Ask my instructor
7
The total amount of interest paid is.
$(Round to the nearest cent as needed.)
ali
Clear all
tv NA
Check answor

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduce the question

VIEW

Step 2: Use FV function to get the accumulated value of loan

VIEW

Step 3: Find the monthly payment

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Angelica received a 12 year non-subsidized student loan of $12,000 at an annual interest rate of 5.6% (compounded monthly). Determine her monthly payment on the loan after she graduates in 4 years. round your answer to the nearest cent.
Sandy Kupchack just graduated from State University with a bachelor’s degree in history. During her four years at the university, Sandy accumulated $11,500 in student loans. She asks for your help in determining the amount of the quarterly loan payment. She tells you that the loan must be paid back in five years and that the annual interest rate is 8%. Payments begin in three months. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling $39,000.00. The prime rate upon graduation was 3.25%. He has decided to pay in full the interest charged during the grace period (i.e., he is not converting it to principal) before starting monthly payments of $650.00 at the fixed interest rate. Complete the table below, including calculations for the grace period and the first three months of his repayment schedule. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance Annual before Interest Transaction Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance Principal Balance after Amount Transaction (-) June 1 $39,000.00 Nov 30 5.75% (inclusive) ☐ ☐ ☐ ☐ $0.00 Dec 31 8.25% $650.00 Jan 31 8.25% $650.00 Feb 29 8.25% $650.00
Jefferson qualifies for an income- adjusted monthly payment of $455. If Jefferson has a subsidized student loan of $47,000 in an annual interest rate of 4% (compounded monthly), how many months are required to repay the loan? (Round your answer to the nearest month)
Am. 111.
A fourth-year student receives a student loan of $5700 at 3.9% interest compounded monthly. After finishing college in 2 years, the student must amortize the loan in the next 7 years by making equal monthly payments. (a) From the time the loan was initiated until graduation, no payments were made but interest accrued. At the time of graduation, what was the amount of student loan debt? (b) After graduation, the student needs to take the balance above and pay monthly installments over the course of 7 years. What is the amount of each monthly payment? dollars
Jefferson qualifies for an income-adjusted monthly payment of $475. If Jefferson has a subsidized student loan of $48,000 at an annual interest rate of 4% (compounded monthly), how many months are required to repay the loan? (Round your answer up to the nearest month.)
Please tell in years and months( round to next month) Paul obtained a loan of $22,500 at 6.30% compounded monthly. How long will it take to settle the loan with payments of $1,100 at the end of every month?
Jeffery Wei received a 7-year non-subsidized student loan of $31,000 at an annual interest rate of 5.9%. What are Jeffery's monthly loan payments for this loan after he graduates in 4 years? (Round your answer to the nearest cent.)
Lacy has a $49,500.00 student loan when she graduates on May 4, and the prime rate is set at 4.5%. She has decided at the end of the grace period to convert the interest to principal, and she sets her fixed monthly payment at $950.00. She opts for the variable rate on her student loan. Create the first four repayments of her repayment schedule. Calculate the total interest charged for both the grace period and the four payments combined. Assume February does not involve a leap year. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance Annual before Interest Transaction Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance (-) Principal Amount Balance after Transaction June 1 $49,500.00 Nov 30 7% (inclusive) ☐ ☐ Dec 31 7% Jan 31 7% Feb 28 7% Mar 31 7% Total combined interest…
Peyton received a 10-year subsidized student loan of $21,000 at an annual interest rate of 4.1%. Assuming Peyton graduates in 4 years, determine Peyton's monthly payment on the loan. (Round your answer to the nearest cent.)
Amarjeet graduated from the University of Calgary on May 2 and has student loans totalling $36,000.00. The prime rate upon graduation was 4.25%. He has decided to pay in full the interest charged during the grace period (i.e., he is not converting it to principal) before starting monthly payments of $800.00 at the fixed interest rate. Complete the table below, including calculations for the grace period and the first three months of his repayment schedule. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance Annual before Interest Transaction Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance Principal Balance after Amount Transaction (-) June 1 Nov 30 6.75% ப $0.00 (inclusive) Dec 31 9.25% $800.00 Jan 31 9.25% $800.00 Feb 29 9.25% $800.00 $36,000.00

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS