Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lacy has a $43,000.00 student loan when she graduates on May 4, and the prime rate is set at 5.5%. She has decided at

Lacy has a $43,000.00 student loan when she graduates on May 4, and the prime rate is set at 5.5%. She has decided at the end of the grace period to convert the interest to principal, and she sets her fixed monthly payment at $1,000.00. She opts for the variable rate on her student loan. Create the first four repayments of her repayment schedule. Calculate the total interest charged for both the grace period and the four payments combined. Assume February does not involve a leap year. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date June 1 Nov 30 (inclusive) Dec 31 Jan 31 Feb 28 Mar 31 Balance before Transaction Annual Interest Rate 8% 8% 8% 8% 8% Payment (+) or Principal Charged Interest Advance Amount (-) Number Interest Accrued of Days Charged Total combined interest charged for grace period and first four months: Balance after Transaction $43,000.00

Step by Step Solution

3.41 Rating (179 Votes )

There are 3 Steps involved in it

Step: 1

The interest rate during the grace period is set at the prime rate of 55 First lets calculate the in... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

12th edition

133423824, 978-0133423822

More Books

Students also viewed these Accounting questions