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A student is graduating from college in 12 months but will need a loan in the amount of $11,576 for the last two semesters. The
A student is graduating from college in 12 months but will need a loan in the amount of $11,576 for the last two semesters. The student may receive either an unsubsidized Stafford Loan or a PLUS Loan. The terms of each loan are:
Unsubsidized Stafford Loan: annual interest rate of 3.85%, compounded monthly, and a grace period of six months from time of graduation
PLUS loan: annual interest rate of 4.15%, compounded monthly, with a balance of $12,065.65 at the time of repayment
Which loan will have a higher balance, and by how much at the time of repayment?
Unsubsidized Stafford Loan: annual interest rate of 3.85%, compounded monthly, and a grace period of six months from time of graduation
PLUS loan: annual interest rate of 4.15%, compounded monthly, with a balance of $12,065.65 at the time of repayment
Which loan will have a higher balance, and by how much at the time of repayment?
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Financial Accounting and Reporting a Global Perspective
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
4th edition
978-1408066621, 1408066629, 1408076861, 978-1408076866
