There are many online student loan calculators that can assist you. Examine the input boxes for one such calculator (Cost of Interest Capitalization Calculator www.finaid.org). After clicking “calculate,” the following information is reported:
Comment 1: After the deferment period of 54 months, the new loan balance is $6,561.78, including $1,061.78 in accrued interest.
Comment 2: Without the interest capitalization there would have been 120 payments of $56.45 adding up to $6,774.00 (including a total of $1,274.00 in interest) plus an additional $1,061.78 in interest paid during the deferment period.
Comment 3: With the interest capitalization, there are 120 payments of $67.34 for a total payment of $8,080.80 (including a total of $1,519.03 in interest plus $1,061.78 in interest accrued during the deferment period).
Comment 4: The total amount paid with interest capitalization is $8,080.80, or $245.03 more than would have been paid without capitalization. That’s an extra $0.04 for every dollar borrowed. Answer the questions below based on the comments above.
a. Examine comment 1. Explain the way in which a student chose to make payments if this comment applies.
b. Examine comment 2. Explain the way in which a student chose to make payments if this comment applies.
c. Examine comment 3. Explain the way in which a student chose to make payments if this comment applies.
d. Comment 4 states that the difference between “with interest capitalization” and “without interest capitalization” results in an extra $0.04 for every
dollar borrowed. Explain how that was calculated using the data given in this comment.

Britta has been accepted into a 2-year medical assistant program at a career school. She has been awarded a $6,000 unsubsidized 10-year federal loan at 4.29%. She knows she has the option of beginning repayment of the loan in 2.5 years. She also knows that during this nonpayment time, interest will accrue at 4.29%.

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Loan Balance Interest Rate Deferment in Months Capitalization Loan Term in Years 5500 4.29 54 At Repayment 10