What is the loan balance after the grace period

Assignment Help Financial Management

Reference no: EM131530426

During four years of college, Nolan MacGregor's student loans are $4000, $3500, $4400, and $5000 for freshman year through senior year, respectively. Each loan amount gathers interest of 1.6%, compounded quarterly, while Nolan is in school and 3.9%, compounded quarterly, during a 6-month grace period after graduation.

a) What is the loan balance after the grace period? Assume the freshman year loan earns 1.1% interest for 3/4 year during the first year, then for 3 full years until graduation. Make similar assumptions for the loans for the other years. (Round your answer to the nearest cent.)

b) After the grace period, the loan is amortized over the next 10 years at 3.6%, compounded quarterly. Find the quarterly payment. (Round your answer to the nearest cent.)

c) If Nolan decides to pay an additional $80 per payment, how many payments will amortize the debt? (Round your answer up to the next whole number.)

d) How much will Nolan save by paying the extra $80 with the number of payments from part (c)? (Round your answer to the nearest cent.)

Reference no: EM131530426

Questions Cloud

Analyze the topic using a doll house : Analyze the topic using A Doll House by Henrik ibsen with a debatable, analytical thesis statement with key points

What is the cross-rate in terms of yen per pound : What is the cross-rate in terms of yen per pound? Suppose the cross-rate is ¥127 = £1. What is the arbitrage profit per dollar?

Discuss the united states airline deregulation act : The accompanying diagram shows data from the U.S. Bureau of Labor Statistics on the average price of an airline ticket in the United States from 1975.

What is the current share price for weirdo stock : What is the current share price for Weirdo stock?

What is the loan balance after the grace period : What is loan balance after grace period? Assume freshman year loan earns 1.1% interest for 3/4 year during first year, then for 3 full years until graduation

Draw a supply and demand diagram for the market for interns : Many college students attempt to land internships before graduation to burnish their resumes, gain experience in a chosen field, or try out possible careers.

What methods of data collection were used in these articles : Why do you think some psychologists are more comfortable with conducting studies using quantitative data instead of qualitative data?

What is expected return on the market portfolio : What is the expected return on the market portfolio at a time when the risk free rate (e.g., T-Bill rate) is 4%

How many footballs can it consume in autarky : Both Canada and the United States produce lumber and footballs with constant opportunity costs. The United States can produce either 10 tons of lumber.

User Account

All Pages