Question

13. Marco took out an unsubsidized student loan for $20,000, which he will start paying in 4

Answer 1

Answer:

Marco will owe $ 23,360 once he graduates.

Step-by-step explanation:

1. Let's review the information given to us to answer the question correctly:

Principal of the loan = 20,000

Time in years = 4

Interest rate = 4.2%

2. What is the amount he will owe once he  graduates?

Let's use the formula of the interest simple, this way:

A = P * (1 + r * t)

where P is the principal of the loan, r the interest rate and t, the time in years.

Substituting with the values we know, we have:

A = 20,000 * (1 + 4 * 0.042)

A = 20,000 * 1.168

A = 23,360

Marco will owe $ 23,360 once he graduates.