Question

URGENT!! PLEASE HELP!!!

Answer 1

Answer:

The correct option is B.

Step-by-step explanation:

The formula for amount after compound interest is

$A=P(1+\frac{r}{n})^{nt}$

Where P is principal, r is rate of interest, n is number of times interest compounded in a period, t is number of years.

It is given that Felix took out an unsubsidized student loan of $40,000 at a 3.6% APR, compounded monthly. The amount after 33 month is

$A=40000(1+\frac{0.036}{12})^{33}=44156.1074$

The amount after 33 month is $44156.1074. So, the new principle amount is $44156.1074.

The monthly payment  of $44156.1074 for 20 years is

$m=\frac{P.V.(\fracr)}{1-(1+r)^{-n}}$

Where, P.V. is present value, r is rate of interest and n is number of times interest compounded.

$m=\frac{44156.1074(\frac{0.036}{12})}{1-(1+\frac{0.036}{12})^{-20\times 12}}$

$m=258.362447711$

$m\approx 258.36$

Therefore the correct option is B.