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Mall waite x C uvedubbcswebdavpid-5206343-dit-content-rid-4277082 1 NAU00 CENE-286 SEcoo ring Economics Homework 2 100 points Due: See BBL earn for Due Date Engineering Economics Homework
Mall waite x C uvedubbcswebdavpid-5206343-dit-content-rid-4277082 1 NAU00 CENE-286 SEcoo ring Economics Homework 2 100 points Due: See BBL earn for Due Date Engineering Economics Homework 2, Must be done INDIVIDUALLY. Submit as pdf on BBLearn along with cover memo Problem: You are going to begin your freshmen year of college and you will be getting astudent loan to help pay for your schooling You have four different options that you need to analyze to answer the questions identified below. The option and the terms of the loans are provided below. Loan Terms: You will need $48,000 ($6000 per semester)tofinish school You will need the loan for four years (eightsemesters) All loans have an annual percentage interest rate (APR)ot 3.75% It is assumed that you will be gainfully employed upon graduation and will begin repaying the principle four calendar years after the loan (s)began You will not make any payments towards the principle of the loan (s) whic you are attending college Loan options: 1. You take the loan in one lump sum of S48,000 at the beginning of the four years. Using this option you will reinvest the remainder of the loan into a CD for six months each time: ie, after paying for the first semester you can invest $42,000 and after paying for the second semester you can invest S36,000, after the third semester you can invest $30,000, etc. This CD wil retum an annual percentage interest rate (APR) of 1.25%. For this option You wilLnot make any payments on the interest (from the loan) generated from the principle while you are attending school, so no payments for four years. 2. like option 1, you take the loan in one lump sum of at the beginning of the four years. Using this option you will reinvest the remainder of the loan into a CD for six months each time. e, after paying for the first semester you can invest $42.000 and after paying for the second semester you can invest $36,000, after the third semester you can invest $30,000, etc This CD will return an annual percentage interest rate (APR) of 125%. However, for this option You will make monthly payments on the interest (from the loan) from the
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