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Artyom0805 [142]
3 years ago
7

To pay for your​ education, you've taken out ​$29,000 in student loans. If you make monthly payments over 10 years at 7 percent

compounded​ monthly, how much are your monthly student loan​ payments?
Business
1 answer:
Scrat [10]3 years ago
7 0

Answer:

$169.07

Explanation:

Data provided in the question:

Loan amount = $29,000

Time  = 10 years

Interest rate = 7% compounded monthly

Therefore,

Interest rate per period, r = 7% ÷ 12 = 0.583% = 0.00583

number of periods, n = 10 × 12 = 120 months

Now,

Loan amount = Monthly payments × [ { 1 - (1 + r )⁻ⁿ } ÷ r]

on substituting the respective values, we get

$29,000 = Monthly payments × [ { 1 - (1 + 0.00583 )⁻¹²⁰ } ÷ 0.00583]

or

$29,000 = Monthly payments × 171.53

or

Monthly payments = $169.07

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