How much more principal does nick owe once the loans

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Question - Janice and Nick each took out a $5,000 federal direct education loan at the beginning of their first year of college.  Then, at the beginning of their second year of college, they each took out another $5,000 of loans.  All loans have an annual interest rate of 5%. Janice's loans were subsidized. Nick's loans were unsubsidized.  He did not pay off any interest while in school, and it was capitalized into the loan when he graduated. They both graduated after four years after starting college, and they both put their loans into repayment immediately upon graduation. How much more principal does Nick owe once the loans enter repayment and his interest has been capitalized?

A) $1,024

B) $1,750

C) They owe the same amount

D) Janice owes more than Nick

Reference no: EM133160398

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