$25,000 at a fixed APR of 9% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.
$25,000 at a fixed APR of 9% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.
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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Question
Consider a student loan of
$25,000
at a fixed APR of
9%
for
25
years.a. Calculate the monthly payment.
b. Determine the total amount paid over the term of the loan.
c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.
Expert Solution
Step 1
Loans are paid by the monthly payments and these are fixed payments that carry the payment for interest and payment for principal amount also.
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