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konstantin123 [22]
3 years ago
15

Henry wants to avoid interest capitalization on his $7,800 unsubsidized Stafford loan. Henry will graduate in four years, and th

e loan has a duration of ten years. The loan has an interest rate of 5. 6%, compounded monthly. How much must Henry pay every month to avoid interest capitalization? a. $14. 56 b. $43. 68 c. $36. 40 d. $31. 20.
Business
1 answer:
Zinaida [17]3 years ago
6 0

The correct statement is that Henry must pay around $48.68 each month to avoid interest capitalization on his unsubsidized Stafford loan of $7800. So, the correct option is B.

The calculation will be done by calculating the amount of interest and dividing such values by the number of months over the period of repayment.

<h3>Calculation of Interest Capitalization </h3>

  • The annuity of education loan will be,

  • \rm Annuity= 7800(1+ \dfrac{0.056}{12})^1^2^x^1^0\\\\\rm Annuity= \$13637.47

  • The interest over such calculation is approximately $5837.47 and hence the payments to be made so that the interest does not capitalize will be,

  • \rm Monthly\ Payments = \dfrac{5837}{120}\\\\\rm Monthly\ Payments = 48.68

Hence, the correct option is B that the monthly payments of $48.68 is to be done to avoid interest capitalization.

Learn more about interest capitalization here:

brainly.com/question/417585

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The farther the standard deviation is from the revenue, the more risky or at risk the stock is.

From the above question, Idol staff has the highest level of risk of 20% (i.e 35-15). Next up is Rail Haul with a risk level of 13% (i.e 25-12). the stock with tthe lowest risk level is Poker-R-Us with 11% (i.e 20-9).

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