Suppose you have a student loan of $35,000 with an APR of 9% for 40 years. Complete parts (a) through (c) below.
a. What are your required monthly payments?
The required monthly payment is $ ?
(Do not round until the final answer. Then round to the nearest cent as needed.)
b. Suppose you would like to pay the loan off in 20 years instead of 40. What monthly payments will you need to make?
The monthly payment required to pay off the loan in 20 years instead of 40 is $ ?
(Do not round until the final answer. Then round to the nearest cent as needed.)
c. Compare the total amount you’ll pay over the loan term if you pay the loan off in 20 years versus 40 years.
Total payments for the 40-year loan = $ ?
Total payments for the 20-year loan = $ ?
