Question

Tamora has just graduated from college. When she entered college four years ago, she took out a $9,100 subsidized Stafford loan, which has a duration of ten years. The loan has an interest rate of 5.4%, compounded monthly. If Tamora makes monthly payments, how much interest will she have paid in total by the time the loan is paid off? Round all dollar values to the nearest cent.

Answer 1

Answer:

The total interest amount that Tamora will have paid in 10 years=$6.496.76

Step-by-step explanation:

Step 1: Express the formula for calculating total amount of interest

The total amount of interest to be paid can be expressed as;

A={P(1+r/n)^nt}-P

where;

A=total amount of interest

P=principal amount of loan

r=annual interest rate

n=number of compounding periods in a year

t=number of years

In our case;

P=$9,100

r=5.4%=5.4/100=0.054

n=12

t=10 years

Step 2: Replace the values and solve

A=9,100{(1+0.054/12)^(12×10)}-9,100

A=9,100{(1.0045)^120}-9,100

A=6,496.757596

The amount rounded off to nearest cent 1/100=0.01 is the same as rounding off to nearest  decimal places

A=$6.496.76

The total interest amount that Tamora will have paid in 10 years=$6.496.76

Answer 2

Answer:

Answer is A: $2,697.20 just took the quiz and good luck out there students!

Step-by-step explanation: