A student takes out a student loan in her first year of college. The loan earns simple interest each month at a rate of 8.75%. Since she is still a student, she does not yet have to repay her loans but the interest accrues on the account. The graph depicting this situation is shown below. Which statement is correct based on the graph? (a) The student loan is now $35,000. (b) The student borrowed money for 12 months. (c) The student borrowed $20,000. (d) The student will owe $30,000 when she begins paying back her loans.
A student takes out a student loan in her first year of college. The loan earns simple interest each month at a rate of 8.75%. Since she is still a student, she does not yet have to repay her loans but the interest accrues on the account. The graph depicting this situation is shown below. Which statement is correct based on the graph? (a) The student loan is now $35,000. (b) The student borrowed money for 12 months. (c) The student borrowed $20,000. (d) The student will owe $30,000 when she begins paying back her loans.
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
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A student takes out a student loan in her first year of college. The loan earns simple interest each month at a rate of 8.75%. Since she is still a student, she does not yet have to repay her loans but the interest accrues on the account. The graph depicting this situation is shown below. Which statement is correct based on the graph?
(a) The student loan is now $35,000.
(b) The student borrowed money for 12 months.
(c) The student borrowed $20,000.
(d) The student will owe $30,000 when she begins paying back her loans.
Transcribed Image Text:Amount to pay back
50000
40000
30000
20000
10000
15
Months since loan
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