Your parents can take out a federal Direct Plus loan to pay for the total remaining cost of your undergraduate education, after any other financial aid (such as federal direct student loan). The simple interest rate was 6.84% for 2015-2016. The standard repayment plan is fixed monthly payments over 10 years, and your parents can elect to defer the start of repayment until six months after you graduate. 1. Suppose that your parents take out a PLUS loan on your behalf on September 1 before your senior year for $10,000, at the rates mentioned above, and begin paying it back six months after you graduate on June 1. How much is their monthly payment.

Q: You receive a 10-year subsidized student loan of $22,000 at an annual interest rate of 4.3%. What…

A: Using excel PMT function to calculate monthly payment.

Q: Your parent started to deposit monthly $20,000 in the bank 2 years after birth. The bank offers are…

A: Amount deposited $20,000 monthly Rate of interest is 6%.

Q: How do I calculate the interest in excel?

A: Please follow the whiteboard for calculations and formula to determine the appropriate interest…

Q: Rhett is about to begin college (4-year) and has received a 10-year $7,500 Federal Direct…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: If you need to take out a  $50,000  student loan  2  years before graduating, which loan option…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: If you need to take out a $10,000 student loan 2 years before graduating, which loan option will…

A: There are three loans, one is a subsidized, second is a federal loan & third is a private…

Q: Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial…

A: The present value is calculated by discounting the future value received over the period of time. An…

Q: If you need to fake out a $10,000 student loan 2 years before graduating, which loan option will…

A: Given: Particulars Subsidized loan Unsubsidized loan Private loan Loan               10,000…

Q: A student graduates from college with 48000 in student loans with a 5.5% annual simple interest…

A: In the given question we require to calculate the amount of loan due after the first payment.…

Q: Kensie will begin college as a freshman next fall and has received a 10-year $6,500 Federal Direct…

A: When a student loan is taken it is paid by the student only when the student finds employment.

Q: Nadia needs to borrow $5000 to pay for ocean cruise tickets for her family. She can borrow from a…

A: APR stands for Annual Percentage Rate. It is a standardized way of expressing the total cost of…

Q: 9. Aisha is looking for a $20,000 loan to buy a car. One financial institution has agreed to give…

A: Loan is a sum of amount borrowed from a lender. It is expected that the loan will be repaid at a…

Q: A financial planning service offers a college savings program. The plan calls for you to make six…

A: The question is related to Return on Investment. The ROI is calculated with the help of following…

Q: Jeffrey Wei received a 6 year non-subsidized student loan of $30,000 at an annual interest rate of…

A: Present Value = $30,000 Interest Rate = 5.9% Time Period= 6 Years Loan Start after 4 Years

Q: A student graduates from college with $31,000 in student loans with a 5.6% annual simple interest…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in equal…

Q: Your son Tommy was just born today (Year 0), and you are planning for his college education. You…

A: Periodic deposit refers to an amount that is deposited at every period for the repayment of a loan…

Q: Larry has decided to take out a loan for college. He expects to graduate 5 years and 6 months later…

A: Interest rate is the rate of interest earned/paid on an investment/loan. The interest will be paid…

Q: Katie wants to save up $8100 to pay for her tuition by making quarterly payments of $440. Determine…

A: Step 1 Payment refers to the exchange of cash, products, or services for goods and services in an…

Q: complete your last year in business school and then go through law school, you will need $5,000 per…

A: Present value is the equivalent value of money required today based on the time value of money and…

Q: When you graduate from college, you apply for and are offered a job that pays $1,900 per month. You…

A: Front end debt to income ratio shows the portion of net income before tax which is used to cover…

Q: You wish to buy your first home. Your annual gross income is $84,000. You also have monthly payments…

A: Mortgage loans are given on the basis of monthly income and other expenses related to the housing…

Q: Your parents are giving you $100 a month for four years while you are in college. At a 6% annual…

A: The objective of this question is to calculate the present value of a series of future payments,…

Q: Implied interest rate and period Consider the case of the following annuities, and the need to…

A: Loans ar paid by equal periodic payments and these payments carry the payment for interest and…

Q: Create an Amortization schedule-see amortization video. How much student debt will I bear by the…

A: The Loan amortization refers to the systematic equal payment of loan and interest spread over a…

Q: You attend college and have 2 loans: A SUBSIDIZED loan for $40,000 with 3.88% APR, and an…

A: Assumption: It is assumed that the time period of the loan is 10 years.

Q: Suppose a graduate student receives a non-subsidized student loan of $11,000 for each of the 4 years…

A: Non-Subsidized Student Loan per year = $11,000 Time Period of Non-Subsidized Student Loan = 4 Years…

Q: Question - : Your child is going to college for the next 4 years. You are setting up a college fund…

A: Present value (PV) is a money related concept that measures the current value of future cash streams…

Q: You receive a 10-year subsidized student loan of $19,000 at an annual interest rate of 6.8%. What…

A: Using excel PMT function to calculate the monthly payment

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.