Question
Jane Doe will be in graduate school for the next two years. She borrowed some money from the bank for her graduate education, which the
Jane Doe will be in graduate school for the next two years. She borrowed some money from the bank for her graduate education, which the bank has accepted to be paid after Jane graduates from school in two years. The bank has accepted to the following payment plan: from the beginning of Year 3 (25 month) to the end of Year 4 (48 month), pay $500 in month 25 and increase payment 5% every month thereafter. How much money should Jane Doe put aside each month (equal amount) for the first 24 months (during graduate school) such that she can pay the loan back after graduation? The bank charges an APR of 12%, compounded monthly.
Ask: A: appropriate Cash Flow Diagram
B: listed variables: r, A1,m,k, i period.
C:Provide the Present Value of the gradient, and the value Jane must set aside.
D:Provide a statement for the answer to Part C.
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