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Option B: Should she repay the loan back in 5 years at 2.9% making monthly payments? Cost of Borrowing Monthly Cost Amount borrowed Option A Option B Your advice for Meg: Pros Cons Total cost of schooling

Option B: Should she repay the loan back in 5 years at 2.9% making monthly payments? Cost of Borrowing Monthly Cost Amount borrowed Option A Option B Your advice for Meg: Pros Cons Total cost of schooling

Essentials Of Investments
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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Meg wants to save for college. The college program she has chosen costs around $6000 a year and is a two year program. She has to take out a student loan to cover the entire cost for both years. Once she has finished college she has to repay the loan. The good news is that interest is not calculated while she is in school, but only after she finishes. What should she do? Option A: Should she repay the loan back in 3 years at 2.9% making monthly payments? Option B: Should she repay the loan back in 5 years at 2.9% making monthly payments? Cost of Borrowing Monthly Cost Amount borrowed Option A Option B Your advice for Meg: Pros Cons Total cost of schooling
Transcribed Image Text:Meg wants to save for college. The college program she has chosen costs around $6000 a year and is a two year program. She has to take out a student loan to cover the entire cost for both years. Once she has finished college she has to repay the loan. The good news is that interest is not calculated while she is in school, but only after she finishes. What should she do? Option A: Should she repay the loan back in 3 years at 2.9% making monthly payments? Option B: Should she repay the loan back in 5 years at 2.9% making monthly payments? Cost of Borrowing Monthly Cost Amount borrowed Option A Option B Your advice for Meg: Pros Cons Total cost of schooling
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