Given that the 6.5% interest on the $5,500 loan is deferred during college, the amount Alex will pay upon graduation is $81.67 monthly.
How can the amount Alex will pay be found?
The number of years for the loan = 10-year
The loan amount = $5,500
The number of years for the interest = 6 years
The monthly payment formula is presented as follows;
[tex]a = \frac{p \times \frac{r}{12} \times {(1 + \frac{r}{12} )}^{84} }{({1 + \frac{r}{12} )}^{84} - 1}[/tex]
Which gives;
[tex]a = \frac{5500 \times \frac{0.065}{12} {(1 + \frac{0.065}{12} })^{84} }{{(1 + \frac{0.065}{12} })^{84}} = 81.67[/tex]
- The amount Alex will pay upon graduation is $81.67 each month
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