Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. matt needs to borrow money to go to college. he ha

Matt needs to borrow money to go to college. He has been granted a student loan...

60.1K

Verified Solution

Question

Finance

Matt needs to borrow money to go to college. He has been granteda student loan of $7000. When is school, he actually only needed$6000. He has two options for paying it back. The great news aboutstudent loans is that interest does not calculate until he finishesschool. What should be choose and why? • Option A: Pay back $1000extra before the interest starts. Pay back the $6000 loan over 3years at 5.2% interest compounded annually by making monthlypayments. • Option B: Use the extra $1000 to help buy a car. Payback the entire student loan over 4 years at 5.2% interestcompounded annually by making monthly payments.

Answer & Explanation Solved by verified expert
4.2 Ratings (715 Votes)
Option 1 Payback 1000 Borrowing 6000 Interest Rate 52 and Repayment Tenure 3 years or 3x1236 months Applicable Monthly Rate 5212 04333 Let the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Matt needs to borrow money to go to college. He has been granteda student loan of $7000. When is school, he actually only needed$6000. He has two options for paying it back. The great news aboutstudent loans is that interest does not calculate until he finishesschool. What should be choose and why? • Option A: Pay back $1000extra before the interest starts. Pay back the $6000 loan over 3years at 5.2% interest compounded annually by making monthlypayments. • Option B: Use the extra $1000 to help buy a car. Payback the entire student loan over 4 years at 5.2% interestcompounded annually by making monthly payments.

Other questions asked by students

Q

prove that connected sets are preserved by continuous functions. please be clear and do not write...

Advance Math
Q

Identify the independent and dependent variable: question 1: a study was conducted to determine whether when...

Basic Math
Q

Describe the two steps that are needed prior to expression of a protein of interest in...

Biology
Q

1. ​A negative pion ( ) is a particle that​ ​has a mass equal to 2.49...

Physics
Q

During 2020, Juan Gonzalez, president of Acme Inc. was paid a semimonthly salary of $6,100. Computer...

Accounting
Q

Find the value of the expression sin 90 cos 135 sec 30 csc 60 2...

Basic Math
Q

83 Navigation A plane is flying with a bearing of 302 Its speed with respect...

Calculus
Q

Need #24 answered and explained, please. 23. Transmountain Oil Company acquired 4 leases during...

Accounting
Q

Bramble Games Inc. adjusts its accounts annually. The following information is available for the year...

Accounting
Q

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts-the B300 and the T500. An...

Accounting
Q

A newly formed firm must decide on a plant location. There are two alternatives under...

Accounting
Q

Which of the following statements about treasury arbitrage is correct? Select ALL that apply. Review...

Finance